Bruised from criticism about his energy policies and sky-high gas prices, President Obama came out swinging Tuesday, announcing a new plan aimed at curtailing Wall Street traders bidding up oil prices and profiting off oil market volatility.
The president's proposal calls for an extra $52 million dollars in funding to expand the scope of government oversight, which would include hiring more "cops on the beat," expanding enforcement authority, upgrading technology regulators need to track complex oil markets, and increasing penalties for speculators found guilty of manipulating oil markets illegally, a senior white house official told reporters.
Traders would also have to cough up their own cash to back trades, in essence requiring them to have more skin in the game and hopefully reducing volatility—and price spikes—in oil markets.
But while Obama claimed to have consumers' interests at heart, some critics wrote off the president's proposal as another political ploy designed to distract from the fact that gas prices have surged almost $.50 since January to about $3.90 on average today, a jump Republicans unsurprisingly blame on the president's energy policy.
"The truth is the president's policies are restricting American energy production, and he's looking for a scapegoat," Brendan Buck, spokesman for Speaker John Boehner, told Reuters. "The American people aren't going to buy it."
What's more, even though Obama tried to connect the crackdown on oil speculation with a decrease in gas prices, many experts don't see the connection based on the global nature of oil markets, at least not in the near term.
"The problem is [connecting] what he's doing and the price of gas going down," CNN chief business correspondent Ali Velshi said Tuesday. "I can't come to the same conclusion." Oil prices are high because of a variety of reasons including increased demand worldwide and tensions in the Middle East, he said. "None of what the president said today changes that," Velshi added.
Still, Velshi admitted that reforming how oil market trading is regulated is probably a good thing, even if consumers' won't necessarily reap immediate benefits. And while he championed the crackdown on oil trading as a way to help ease financial stress on consumers, President Obama himself conceded that the numbers Americans see at the gas pump won't go down overnight as a result of his new plan.
"None of these steps by themselves will bring gas prices down overnight," he said, reaffirming his administration's commitment to alternative energy sources and increased fuel efficiency. "But it will prevent market manipulation and make sure we're looking out for American consumers."