Steve Spencer, who owns Spencer Construction, buys gas for his work truck… (Markell DeLoatch / Associated…)
WASHINGTON -- President Obama is proposing legislation to curb manipulation of oil markets that can drive up the price of gasoline.
Obama wants to boost funding for the Commodity Futures Trading Commission to do more surveillance of the oil futures market and wants to increase the penalties for illegal market manipulation, including raising the maximum fine to $10 million from $1 million for violations.
Obama plans to talk about the proposals at the White House on Tuesday morning.
The White House has been looking for ways to deflect the political pressure over high gas prices, and on Tuesday it tried to divert the focus to Congress and the energy traders.
Senior administration officials said the proposals, if approved by Congress, would tighten oversight of the energy markets and prevent or stop misconduct that could have an effect on prices.
“Whether it’s Enron on any other case, you can point to areas where the lack of adequate oversight, the lack of cops on the beat, and the lack of rigor in overseeing these markets has been a serious problem for consumers,” said a senior administration official, who was not authorized to speak publicly before the announcement.
But officials did not point to any evidence that misconduct or illegal activity was on the rise or was contributing to the escalated prices. Officials acknowledged that high gas prices are largely attributed to unrest in the Middle East and a rise in demand thanks to economic growth.
Many Democrats in Congress have pushed the CFTC to crack down on excessive oil speculation. Obama wants lawmakers to immediately give the agency an additional $52 million to increase staff monitoring the markets and upgrade technology to strengthen monitoring.
But Republicans want to cut funding for the CFTC because of the high budget deficit. And Obama's proposals were not received well by a key GOP leader Tuesday.
"If there's fraud going on, the administration has the tools to stop it," said Brendan Buck, spokesman for House Speaker John Boehner (R-Ohio). "The truth is the president's policies are restricting American energy production, and he's looking for a scapegoat. The American people aren't going to buy it."
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