With inflation at a 40-year high, Democrats have touted measures to aggressively fight price increases across a number of areas, from gas prices to prescription drugs to child care. But those efforts have often been hung up by intraparty divisions over various plans.
Let’s focus on gas prices for today.
“House Democrats, including many of the party’s vulnerable incumbents, are pushing to provide consumers relief from pain at the gas pump through rebates or tax cuts,” Roll Call’s Lindsey McPherson reports. “But some admit the proposals aren’t going anywhere and would amount to little more than political messaging bills.”
Perhaps the latest example: a proposed tax on the windfall profits of big oil companies. Sen. Sheldon Whitehouse (D-RI) and Rep. Ro Khanna (D-CA) last week introduced a plan to curb profiteering by large oil companies by taxing them on the difference between the current price of oil and the pre-pandemic average price from 2015 to 2019, $66 a barrel. The money raised by the tax would be sent to consumers via rebate checks to individuals earning up to $75,000 a year or couples making up to $150,000.
The lawmakers said that the new tax would raise about $45 billion and single filers would get about $240 a year while couples would get about $360. Those projections were based on an oil price of $120 a barrel, a level reached earlier this month. Prices have fallen since then but remain above $100 a barrel.
Calling out big oil: President Joe Biden this week argued that gas prices should be falling as oil prices do. “Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31,” he tweeted. “Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.” And Senate Majority Leader Chuck Schumer (D-NY) announced this week that Congress would call on oil and gas executives to testify about what he called an “alarming spike” in energy prices and why their companies are buying back stock instead of giving drivers a break at the gas pump. “The bewildering incongruity between falling oil prices and rising gas prices smacks of price gouging and is deeply damaging to working Americans,” Schumer said.
A windfall profits tax may face a difficult path, though. Sen. Joe Manchin (D-WV), who chairs the Senate Energy and Natural Resources Committee, isn’t sold on the idea, The Hill’s Alexander Bolton reports, adding that Republicans don’t think he’d get to “yes” on it. Manchin told The Hill that he wants to hold a hearing on the plan.
Even if Manchin were to support the idea, Republicans won’t, meaning it would likely get stalled in the Senate. “I can’t see any Republican supporting it,” Sen. Lisa Murkowski (R-AK) told The Hill. “I don’t see that it gets any traction and for lots of good reasons. If you want to send a positive signal to producers that they might want to be doing more, the worst thing you can do is threaten them with a windfall tax.”
Other plans for lowering gas prices: Other Democrats are still pushing alternative plans to provide some relief for drivers. “There are conflicting ideas within the caucus,” said House Ways and Means Committee Chairman Richard Neal (D-MA) told Punchbowl News this week.
• The gas tax holiday proposed by some Senate Democrats and endorsed by several Democratic governors faces pushback from lawmakers concerned that it would cut into vital infrastructure funding.
• Punchbowl reported Thursday that some Democrats have pushed to send Americans direct payments for gas and even build a website where drivers can apply for such payments. Rep. Earl Blumenauer (D-OR) told The Washington Post that he favors direct rebates to low-income drivers. “We've sent direct checks before,” he said. “We can do that. We know who these people are. And if that's what you want to do, do it in a targeted way. Make sure it gets to them and it isn't gummed up in oil company machinations and supply chain problems.”
• House Speaker Nancy Pelosi (D-CA) on Thursday endorsed the idea of forcing oil companies to use drilling permits or lose them. “There are 6,000 permits out there that people could drill, industry could drill,” Pelosi told reporters. “So they don't need to be upending our initiatives to save the planet from the climate crisis. If they want to drill, they have places to drill. Use it or lose it.”
