Kerry to Unveil Plan to Reduce Gas Prices
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By Jim VandeHei and Mike Allen
Washington Post Staff Writers
Tuesday, March 30, 2004
SACRAMENTO -- With gasoline prices hitting new highs across the country, Sen. John F. Kerry plans to propose new policies on Tuesday for reducing auto fuel costs in a move certain to escalate the election-year political fight over prices at the pump.
Facing GOP attacks for advocating higher gas taxes as a senator, the Massachusetts Democrat will call on President Bush to apply greater pressure on oil-producing nations to increase production, in a bid to drive down crude oil prices, and to temporarily suspend filling U.S. oil reserves, said Stephanie Cutter, a Kerry spokeswoman.
Kerry will argue that diverting oil intended for U.S. reserves directly to the market will help depress gas prices, though analysts say that probably would have a negligible effect. Kerry also intends to reiterate his longer-term plans for decreasing the country's dependence on foreign oil and increasing its reliance on cleaner-burning alternative forms of energy.
As summer approaches, soaring gasoline costs are emerging as a top pocketbook concern of consumers and businesses with steep transportation costs, with prices at the pump topping $2 a gallon on the West Coast and averaging a record-high $1.80 nationwide.
The Democrats believe that the price of gas could become a major flash point in the presidential debate over oil, the economy, and even Iraq and broader Middle East foreign policies. As one measure of the political sensitivity of the issue, a group of House Republicans, looking ahead to Memorial Day visits to their districts, has formally asked the White House to do what Kerry is calling for -- ease pressure on prices by suspending shipments to the Strategic Petroleum Reserve, the government's emergency stockpile of oil.
Earlier this month, the Senate passed a nonbinding amendment, a matter the House has not taken up, calling for the suspension of shipments to the reserve. Sponsors contended that it could lower prices by a dime or more per gallon. Administration officials said they believe that suspending the purchases would have a negligible effect on gas prices. A senior administration official, who insisted on anonymity because he sets policy and is not a spokesman, said the White House would support such a move only in the case of a "severe supply disruption" such as an embargo or a political crisis in a major oil-producing crisis.
"There's not a heck of a lot of options for the administration," the official said. Administration officials said the White House sees lawmakers' concern about the high prices as an opportunity to win passage of a major energy bill that Bush has been pushing for since his first year in office. Bush's National Economic Council has scheduled a meeting for Wednesday to consider its legislative strategy on the bill, which the House passed last year. The Senate may take up the bill in coming weeks if the two parties can work out a dispute over amendments.
U.S. policymakers have had little success in exerting control over short-term gas prices, which ebb and flow based largely on world demand and oil production decisions made by the Organization of the Petroleum Exporting Countries. Demand is expected to remain strong globally, and OPEC is scheduled to meet Wednesday to determine whether it will follow through on a previously planned cut in production.
The last time an administration tapped the Strategic Petroleum Reserve, the impact on price was negligible. When President Bill Clinton ordered the sale of 30 million barrels of oil on Sept. 22, 2000, the average price of regular gas had climbed to more than $1.56. By Oct. 24, when the oil began to hit the market, prices had slipped one penny, according to the Energy Department's Energy Information Administration.
Regardless of what short-term steps the administration or Congress may agree to, there is little hope that prices will sink significantly anytime soon, according to the Lundberg Survey of 8,000 stations nationwide. Gas prices climbed 3 cents more in the past two weeks to a record high in real dollar terms, the survey said. Early-1980s prices were markedly higher when adjusted for inflation.
"This administration has one economic policy for America: 3 million jobs lost and driving gas prices towards $3 a gallon," Kerry said in an economic speech here. Vice President Cheney responded by saying: "After voting three times to increase the gas tax and once proposing to increase it by 50 cents a gallon, he now says he doesn't support it."
As this back-and-forth shows, both parties believe the issue packs a political punch.
Of the nine states with the highest regular gas price increases, four -- Arizona, Nevada, Oregon and Washington -- are considered swing states in the upcoming elections.
In addition to Cheney's poke at Kerry in his speech, the Bush campaign dispatched surrogates to Minnesota, Arizona, Missouri, Maine and New Hampshire to hold news events criticizing Kerry for advocating a gas tax increase in the past.
Kerry did vote for the tax increase but has since said he opposes one. The Bush campaign has also linked Kerry's earlier call for a tax increase with his current support for raising fuel-economy standards on sport-utility vehicles and trucks -- a move strongly opposed by the auto industry and many consumers. Steve Schmidt, a spokesman for the Bush campaign, said Kerry has a "philosophy that an effective energy policy is manipulating what kind of automobiles Americans can afford to drive."
Kerry will use his new proposal to fault Bush for not applying adequate diplomatic pressure on oil-producing nations during his administration, Cutter said. A top Kerry policy adviser, who demanded anonymity to discuss a policy Kerry has yet to announce, said a key to lower gas prices over the long term is taking a tough line with OPEC nations.
Kerry will top his Tuesday speech in San Diego with his critique of Bush's oil and gas policies, Cutter said. He will also criticize Bush's management of the Strategic Petroleum Reserve. Presidents can tap the reserves if disruptions in oil supply threaten the economy.
"The Bush administration has put [the reserve] program on automatic pilot without regard to the short term effect on the U.S. market," the Kerry campaign said in a summary document provided to reporters.
Kerry would temporarily suspend filling the reserve until "oil prices return to normal levels," it states. Allen reported from Washington. Staff writer Jonathan Weisman in Washington contributed to this report. |
