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Mitch Daniels’s unfounded claim: President Obama wanted higher gas prices

at 10:00 AM ET, 03/01/2012

Let’s give the president credit for one domestic policy that worked. He wanted higher gas prices, and he got them. He said it. Secretary Chu said $8, or about what they pay in Europe, would be great. Secretary Salazar said it could go to $10; he still wouldn’t be for allowing drilling in many of the places where we know there’s an awful lot of domestic production. And so they’ve gotten the doubling of gas prices and perhaps worse as a conscious policy of this administration. May be the one thing they set out to do and actually accomplished.” — Indiana Gov. Mitch Daniels during an interview on Fox News Sunday, Feb. 26

Republicans lately have ramped up their rhetoric on gasoline prices, focusing on an issue that resonates with struggling Americans despite slowly but steadily improving jobs numbers that have taken some steam out of their economic arguments. We showed in previous columns this week that the price increase is not as bad as some make it out to be, and that the unusually low cost of gasoline when President Obama took office — during a severe economic downturn — explains how they jumped at such a high rate.

Still, Republicans know that pain at the pump can affect the president’s reelection chances, and they’re fanning the flames of discontent.

We took a look at Obama’s energy policies and searched for proof that he or Energy Secretary Steven Chu said that cost hikes “would be great.” We also looked at Secretary Ken Salazar’s stance on drilling to find out whether the Interior Department director really said he wouldn’t budge on drilling in the face of $10-per-gallon gas.

The Facts

We can’t be sure why Daniels thinks the Obama administration had a “conscious policy” of driving up gasoline prices. His office did not respond to questions about the matter.

To the best of our knowledge, the president never said he wanted the cost of gasoline to rise. However, he did select Steven Chu to lead the Energy Department, and Chu clearly supported the idea of purposely raising prices — at least before he went to work for the federal government.

Prior to heading the Energy Department, Chu worked as director of the Lawrence Berkeley National Laboratory, a group focused on research on biofuels and solar-energy technology. During that time, he talked about revamping U.S. energy policy. He also advocated higher gas taxes for the purpose of encouraging people to buy fuel-efficient cars, use public transit and live closer to work.

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” Chu told The Wall Street Journal during a September 2008 interview, before he became Energy Secretary. The cost of gas in Europe at the time was between $8 and $10 per gallon.

Chu promoted his ideas as a way to combat climate change and reduce dependence on fossil fuels, especially foreign oil. But many conservatives deride such ideas as social engineering. They say the best way to wean the nation off foreign oil is to do more domestic drilling.

As for the president, he has rejected the idea of raising the gas tax so far. He said weeks before his inauguration that he was not planning on implementing a higher tax on fuel, telling NBC’s Tom Brokaw that “putting additional burdens on American families right now, I think, is a mistake.”

It’s worth noting that the Obama administration in mid-2011 gave some thought to taxing drivers by the mile. The White House claimed at the time that the idea did not represent an official proposal, and that it came from an early draft of a potential Transportation Opportunities Act, which never saw the light of day.

For what it’s worth, the tax-by-the-mile concept in this case appears to have originated with a Congressional Budget Office report on alternative approaches to highway funding. The report came out more than a month before the now-defunct Transportation Opportunities Act surfaced in the news.

As for Daniels’s reference to Salazar and $10 gas, he was talking about a 2008 standoff between the then-senator Salazar and Republican Sen. Mitch McConnell, who had called for a bill to increase offshore drilling if gas prices reached a certain point. Salazar, representing majority Democrats, objected to the proposal with each price-point McConnell named as a potential trigger: first $5 per gallon, then $7.50, and finally $10.

Salazar has a somewhat mixed record on environmental issues. He supported and co-sponsored bills to increase fuel-efficiency and promote alternative fuels, but he also voted yes on a 2006 bill to allow more drilling in the Gulf of Mexico. In 2006, the League of Conservation Voters gave him a 78 percent rating, on par with moderate Republican Sen. Olympia Snowe of Maine, who earned a 74 percent.

The Obama administration likes to brag that the United States relies less now on foreign crude than it has during any time in the past 16 years, but as we have noted this is not because of administration policies. The Energy Department has said the main reason is because consumption plunged because of the poor economy and because of changes in efficiency that began in 2006, before Obama became president.

(UPDATE: Chu testified before Congress on March 1 that “we very much want to only slow the price but reverse the price of increasing gasoline.” However, he declined to retract his 2008 comments.)

The president has said time and again in recent weeks that “there are no quick fixes” to the problem of rising gas prices, and “we can’t just drill our way to lower gas prices.” He has promoted what he describes as an “all-of-the-above strategy” to deal with the issue.

(UPDATE: The New Republic has noted that GOP primary front-runner Mitt Romney made similar remarks in 2006 as governor of Massachusetts. When the state’s Republican lieutenant governor pushed to suspend the state’s 23.5 cent gas tax during a price spike, Romney said “I don’t think that now is the time, and I’m not sure there will be the right time, for us to encourage the use of more gasoline,” according to the Quincy Patriot Ledger. “I’m very much in favor of people recognizing that these high gasoline prices are probably here to stay.”)

We took a look at inflation-adjusted gas prices dating back to 1919 earlier this week, determining that the situation isn’t as bad as some Republicans make it out to be. Although the cost has reached a record high, the price is just 13 cents higher than it was during Bush’s last year in office.

The Pinocchio Test

Daniels, with his long experience in government at the federal and state level, is grasping at straws by suggesting that ideas advocated by officials before they enter an administration have now become the policy of that administration. As the former White House budget director well knows, individual ideas rarely survive the brutal policy-making process, and ultimately officials must support whatever the president decides.

Chu and Salazar may have expressed certain policy views before they joined the administration, but they now work for Obama. What counts is the current policy. We can find no evidence that the president has “a conscious policy” to double gasoline prices.

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UPDATE: John Ranson, a critic of this column, pointed to a comment from Obama in 2008--when still a senator--suggesting that Obama thought higher gasoline prices might actually be good in the long run. He argues that Obama, though his actions, is implementing this policy. Click here to read more.

 
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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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