Democrats and the Gas Price Crisis — About to Blow Another Opportunity?

[posted on Huffington Post, April 26]

So now everyone is worked up about gas prices.

The Republican leadership in the Congress has called for Federal Trade Commission investigations into price-gouging, and President Bush amusingly has done the same.

This all reflects what the Washington Post concisely said in a Tuesday headline: “Cost of Gas Puts Pressure On GOP.”

The Democrats, understandably, are very happy. People don’t like high gas prices, and everyone understands the Republicans are the party of Big Oil, and thus get blamed for high prices.

But the Democrats are positioning themselves to blow the political opportunity, not to mention failing to advance a policy that would actually help consumers and the environment.
The main Democratic response has been to call for … Federal Trade Commission investigations. OK, to be fair, what the Dems want would give the FTC power it does not now have, and perhaps would result in a more serious effort than what the Republicans have in mind.

But by way of contrast, consider this: three decades ago, when the oil giants profiteered in the wake of the first oil embargo, almost half the U.S. Senate voted to break up the integrated oil companies.

While it would make even more sense on the merits now than it did then, asking the Democrats to support such a move today is perhaps asking too much. (Beyond political cowardice, one reason the Dems may be uncomfortable going into this territory is that the oil industry consolidation that facilitates price gouging and other abuses occurred largely on Bill Clinton’s watch.)

What is not too much is to ask the Democrats not just to blow hard about price gouging, but to support measures that would directly do something about it. And the simplest thing would be to enact a windfall profits tax, which would take Big Oil’s ill-gotten gains, and re-direct it to consumers and, most critically, investments in renewable fuels.

There are such proposals in the Congress, made after the gas price spikes of last year, including the huge jump following Hurricane Katrina. However, just 40 members of the House of Representatives were willing to co-sponsor the leading legislation calling for a windfall profits tax on the oil companies (H.R,2070, the Gas Price Spike Act of 2005, introduced by Representative Dennis Kucinich of Ohio). Only eight members of the Senate co-sponsored the leading windfall profits bill there (S.1631, the Windfall Profits Rebate Act of 2005, introduced by Senator Byron Dorgan of North Dakota). (To his credit, Senate Minority Leader Harry Reid was one of those eight).

The Democratic chatter inside the beltway is now all about delivering a “vision” and moving away from laundry lists. No doubt vision is important, though most of the discussion is really akin to commercial branding (Toyota is “moving forward,” Chevrolet is leading “an American Revolution,” Ford is “Built for the Road Ahead,” etc.) than setting out real points of principle.

Lost in the discussion about “vision” is the absolutely vital discussion about line drawing – as in, how do the Democrats meaningfully distinguish themselves from Republicans.

Calling for better FTC investigative power doesn’t meet the test.