Pumped Up
Do oil and politics mix? As the price of gas tops $3 a gallon, Politicians from the White House on down are hoping they do
Desperate to show that they feel the citizenry's pain at the gas pump, politicians battled last week to don the mantle of Robin Hood. Leaders of both parties took turns pledging to dispatch the IRS to slap around the oil companies--take away tax breaks, hit them with a windfall-profits tax, and even haul them in for a good audit. Democrats proposed a summer holiday from the federal gasoline tax while Republicans favored simply mailing out $100 rebate checks.
Certainly no one expects a handout from Uncle Sam to turn back the clock on rising gas prices, which topped $3 a gallon in many places last week. But it wouldn't even go far as a feel-good measure, with the typical two-car family on track to spend at least $1,260 more to drive this year than it did five years ago. Subtracting the 18.4-cent federal tax from the pump price would only put prices back to where they were two weeks ago. Still, alarm bells were ringing all over Washington, with average gas prices up 30 percent from a year ago and nearing the all-time high after Hurricane Katrina.
No excuses. "This is not something that is disconnected from the voters, or obscure to them, or something that tangentially affects them," says GOP pollster Tony Fabrizio. "This is something they pay every week or several times a week."
Pity the poor politicians. There's nothing the federal government can do in the short term about a global imbalance in oil supply and demand, the nuclear ambitions of an oil-rich Iran, and a shortage of U.S. gasoline refining capacity. "It's like the weather," says Texas oilman T. Boone Pickens. "There's a lot said about it, but there's not anything you can do about it. There's nothin' the government can do." But poll-watchers know that average American voters aren't interested in excuses. In a survey that bodes ill for any incumbent, pollster Daniel Yankelovich found that 85 percent of Americans believe the government could do something about oil prices if it tried. Yankelovich wrote in Foreign Affairs that energy has become a classic "tipping point" issue, where an overwhelming majority is concerned, with unease intense and a widespread belief that government could be doing far more.
In suburban Philadelphia, Democrat Lois Murphy has been working the voters right at the gas stations in her bid to unseat vulnerable GOP Rep. Jim Gerlach. "It was really quite educational," she says. "People were spending $75 to fill up their trucks. People were very angry, very frustrated, very concerned. People volunteered that they were looking for a change in Congress." Gerlach, for his part, was calling for tough scrutiny of the oil industry, a suspension of the federal gas tax, and "serious measures" in short order. "Congress needs to make it a front-burner issue," he says. Murphy noted, however, that her opponent has taken campaign funds from the oil and gas industry--putting her finger on a sore spot for the entire Republican Party. The Center for Responsive Politics found that Big Oil contributions are more lopsided this year than ever before in 16 years of tracking, with 84 percent of industry dollars flowing to the GOP.
Spin city. "It's a dreadful nightmare for the Republicans," says Democratic strategist Bill Carrick, who points out that the issue has particular resonance because both President Bush and Vice President Cheney are former oilmen. Democratic memos circulating last week made liberal mention of the task force of energy industry officials that met with Cheney early in the administration, the records of which have been jealously guarded through several lawsuits. "You can spin a lot of conspiracy theories out of that," says Ross Baker, political scientist at Rutgers University.
For his part, President Bush did his best to trade his image as a Texas wildcatter for one as a New Age alternative- fuels booster. He appeared at an ethanol industry meeting to back wider use of the corn alcohol fuel, proposed a modest rollback in tax breaks for the industry, and suspended government purchases of oil for the Strategic Petroleum Reserve. The latter move was one Bush rejected two years ago when recommended by his 2004 opponent, Democratic Sen. John Kerry of Massachusetts. But now, Bush says, "every little bit helps."
Likewise taking a page out of the Democrats' playbook, Bush and the top Republican leaders on the Hill, House Speaker Dennis Hastert and Senate Majority Leader Bill Frist, all called for tough scrutiny of any potential price gouging by the oil industry. The pledge of vigilance came as four large oil companies reported combined quarterly earnings of more than $21 billion, a 6 percent increase from last year. The companies took out full-page newspaper ads urging Americans to view their profits as a windfall for millions of retirement funds and for the nation's energy future.
Cornering Democrats. Republicans also returned to old favorite themes, such as the need to open the Arctic National Wildlife Refuge to oil exploration. Senate Republicans linked their $100 rebate proposal to a planned vote on Alaska drilling this week, hoping to corner Democrats into both voting against taxpayer relief and displaying their steadfast opposition to energy exploration there. Of course, it was moderate Republicans in the last Congress who put the kibosh on further drilling in environmentally sensitive areas.
GOP senators from New England also joined with Democrats last year to block oil refiners from gaining protection from lawsuits for cleanup of the clean-air additive MTBE, particularly in the Northeast. Refiners, as a result, are abruptly halting MTBE use this summer--contributing to high prices because of the changeover's logistics.
With the threat that the summer driving season and hurricanes could push prices even higher, the political peril going into the pivotal November election is great. "I don't think anyone actually believes they can vote for someone who can lower their gas prices," says GOP pollster Fabrizio. "But this is a point of frustration that feeds into the 'throw the bums out' mentality."
With Dan Gilgoff and Rick Newman
This story appears in the May 8, 2006 print edition of U.S. News & World Report.