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President Repeats First-Term Answers to Rising Gas Prices

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President Bush said Tuesday that Congress is blocking his proposals to deal with high gas prices and dragging its feet on legislation to make more student loans available and ease the mortgage crunch. Video by AP

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"Only President Bush could allow Big Oil to write our nation's energy policy," said Senate Majority Leader Harry M. Reid (D-Nev.).

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Senate Minority Leader Mitch McConnell (R-Ky.) responded, "It's clear that, on the production side of the equation, this new majority is not interested in doing anything."

But this year feels different, said Sen. Pete V. Domenici (R-N.M.), who has been involved in energy policy for decades. Prices are much higher than those that usually follow normal spring spikes, and with rising international demand, there is no sign that prices will fall significantly.

Much of the Senate legislation in the works is likely to fall victim to partisan bickering. Democrats are likely to call for price-gouging investigations and will try to roll back tax subsidies approved in 2005 for the oil companies to pay for tax relief to consumers. Barbara Boxer (D-Calif.), chairman of the Senate Environment and Public Works Committee, called yesterday for the sale of oil from the Strategic Petroleum Reserve, a 700 million-barrel emergency stockpile of crude oil that is equivalent to nearly two months' worth of U.S. petroleum imports. None of those ideas is likely to get past a Republican filibuster, let alone a presidential veto.

Other measures, however, are gaining bipartisan support. Sen. Byron L. Dorgan (D-N.D.) announced yesterday that he now has a veto-proof margin -- 49 Democrats, two Independents and at least 16 Republicans -- to pass legislation that would temporarily halt purchases for the petroleum reserve, asserting that such a move could have a dampening impact on oil prices.

"With the high gas prices, if we could even have an effect on the futures and the hedgers market in this area, that it would be a positive step," said Sen. Kay Bailey Hutchison (R-Tex.), usually a stalwart Bush ally. "So I have said that I think, maybe, a pause, now, and then look at it in a month or two."

Bush said he was opposed to the idea, however, arguing that the stockpile might be necessary in case of a terrorist attack on oil facilities and that halting contributions would have little impact on gasoline prices. "On a cost-benefit analysis, I don't think you get any benefits," he said.

Bush also pointed to a lack of U.S. oil refinery capacity, saying that no new refinery has been built for 30 years. Refinery capacity has been a problem in the oil industry and was blamed for driving up prices, especially in 2006-2007. But oil companies have been expanding existing refineries, boosting U.S. capacity by 2 million barrels a day since 1985, to 17.6 million barrels a day. Refined imports from the Middle East and Europe make up the difference.

With the economy teetering, some Republicans are also bucking Bush's demands -- repeated yesterday -- that an upcoming war spending bill stick to his $108 billion request, with no additional funding for domestic priorities, such as an extension of unemployment insurance and additional education benefits for returning war veterans.

On another oil-related complaint from lawmakers, Defense Secretary Robert M. Gates this week agreed to cut $171 million in Iraq funding that had been designated for neighborhood police stations, according to a letter to Sen. Carl M. Levin (D-Mich.), chairman of the Senate Armed Services Committee. Many Democrats have complained that Iraq should pay for more of its own security costs because of significant budget surpluses.

Staff writers Karen DeYoung and Steven Mufson contributed to this report.


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