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Economy puts heat on politicians

As prices rise and constituents call for action, officeholders float proposals and seek to deflect blame.

April 30, 2008|Richard Simon and James Gerstenzang | Times Staff Writers

WASHINGTON — Rising anxiety over the economy, especially soaring gasoline and food prices, is forcing politicians from Capitol Hill to the White House to the campaign trail to scramble for a response.

President Bush on Tuesday sought to assure Americans that he was aware of the problems they faced in paying bills but said there was "no magic wand" he could wave to bring down energy costs.

Congressional Democrats and Republicans rushed to draft new energy proposals -- and dust off old ones -- in order to shield themselves from blame for high gas prices, while plotting strategy for what will be months of positioning on the issue.

The ideas being offered -- including Bush's renewed call for opening the Arctic National Wildlife Refuge to drilling and Democrats' demands for investigations of the oil industry and a windfall profits tax -- have been debated for years. Even if approved, they would provide little immediate relief.

But politicians have grown increasingly jittery as pump prices hit a record high Tuesday -- a national average of about $3.61 a gallon for self-serve regular, up from $2.95 a year ago, according to AAA -- and oil companies reported big profits this week.

The high gas prices have come amid a declining job market, a housing crisis and rising grocery prices that are being felt in all regions of the country.

On Capitol Hill, some lawmakers accustomed to hearing from voters about gasoline prices said they had never gotten more calls.

"I was home in Alaska over the weekend, and everywhere that I went the price of gasoline was the main topic," Republican Sen. Lisa Murkowski said. "What people really care about, what they really want to know is: What are you doing, Congress?"

Sen. Norm Coleman (R-Minn.) said three motorists approached him to complain about gas prices as he was filling up his car.

A number of Republicans have joined Democrats in pressing Bush to give ground on his refusal to suspend purchases for the Strategic Petroleum Reserve.

Bush has resisted halting the purchase of 67,000 to 68,000 barrels of oil a day for the emergency stockpile, contending that it is needed to guard against an interruption of the flow of foreign oil to the United States. He also has argued that a halt would have no significant impact on prices because the daily purchase amounts to one-tenth of 1% of global oil demand.

"I support the goal of protecting America's energy security," said Sen. John Barrasso (R-Wyo.). "But the federal government shouldn't be competing with consumers for oil."

With the new Republican support, Sen. Byron L. Dorgan (D-N.D.) said he had the votes to attach to a bill moving through the Senate a veto-proof measure that would suspend purchases.

A number of Republicans also are pushing to suspend or repeal the requirement that greater amounts of ethanol, especially from corn, be added to the nation's gasoline supply, contending that the mandate has driven up food prices.

"While the renewable-fuels mandate was intended to lessen the dependence on foreign oil, it has done little but add more strain to an already shaky economy," said Rep. Jeff Flake (R-Ariz.).

But efforts to freeze the mandate face strong resistance from farm-state lawmakers who dispute that it has driven up food prices, and a number of ethanol supporters argued Tuesday that without biofuels, pump prices would be higher.

"Ethanol is having the impact that we hoped that it would by increasing supply," Sen. John Thune (R-S.D.) said.

Bush avoided saying whether he favored a summer-long moratorium on the federal gasoline tax of 18.4 cents a gallon, an idea embraced by the presumptive Republican presidential nominee, Sen. John McCain of Arizona.

Of the Democratic presidential candidates, Sen. Hillary Rodham Clinton of New York has favored suspending the federal gas tax, and Sen. Barack Obama of Illinois has opposed it. The idea faces resistance from a large number of lawmakers from both parties, who fear that a moratorium would cut funding for highway projects.

Bush sought Tuesday to lay part of the responsibility for high gas prices at Congress' doorstep, assailing lawmakers for failing to approve his longtime goal of opening the Arctic refuge to drilling in order to increase domestic energy supplies.

But opponents of that idea, including McCain, have argued that the drilling would spoil an environmental treasure, that oil found there would take years to reach the market and that it would have a negligible effect on prices.

Bush declined to say whether the economy had entered a recession -- a point over which, he said, "economists can argue" -- after saying last week that it had not. "The average person doesn't really care what we call it," Bush said.

On the presidential campaign trail, the economy also has gained new attention.

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