Congress Preparing Bill to Attack High Gas Prices

WASHINGTON — With voters strapped by high gas prices, the Democratic leaders who run Congress will propose legislation as early as next week aimed at easing motorists' misery at the pump.

"The leadership is still talking about that plan" and negotiating the provisions it will include, Sen. Maria Cantwell, D-Wash., said Friday. Cantwell is a member of the committees that oversee energy and commerce.

She predicted that one certainty is that "Congress is going to police oil markets" to make sure speculators and producers "are not artificially driving up the price of gasoline."

The legislation is also likely to include a temporary windfall profits tax on oil companies that are reaping record returns and a temporary halt to filling the Strategic Petroleum Reserve.

Sen. Jeff Bingaman, D-N.M., chairman of the Energy and Natural Resources Committee, said the quickest way to increase the supply of oil and hopefully lower the price is to stop pumping it into the nation's strategic reserve.

"Right now, we're taking 70,000 barrels per day off the market to add it to the SPR. This is a policy that is completely wrongheaded and should be stopped immediately," Bingaman said in a Senate speech Thursday.

Senate Republicans, who had earlier opposed the idea, supported a temporary halt at a news conference Thursday.

"At $120 a barrel, the time has come for us to have a moratorium," Sen. Kay Bailey Hutchison, R-Texas, told reporters on Capitol Hill.

Sen. Byron Dorgan, D-N.D., has already proposed legislation to stop deliveries to the reserve as long as the price of crude oil remains above $75 a barrel.

President Bush opposes a halt, saying it's "in the national interest" to fill the reserve. Stopping would make no difference in oil prices because the amount being added to the reserve represents only 0.1 percent of the world's supply, Bush said Tuesday.

At their news conference, the Republicans unveiled a bill that also called for more domestic oil drilling, including in the Arctic National Wildlife Refuge and some offshore areas where oil and gas exploration are now banned.

"This bill says that we can start taking advantage of the billions of barrels of domestic oil that we are not using and begin to reverse the cycle of dependence on foreign oil," said Sen. Pete Domenici of New Mexico, the ranking Republican on the Energy and Natural Resources Committee.

One proposal that may not be included in the Democratic plan is to suspend the federal gas tax over the summer. Two of the three remaining major presidential candidates — Sen. John McCain, R-Ariz., and Sen. Hillary Clinton, D-N.Y., support this plan, saying that the most vulnerable Americans need all the help they can get. The other Democrat running, Sen. Barack Obama of Illinois, calls it a "gimmick" that will cost jobs and make highways less safe while barely helping consumers.

Bingaman also said he is opposed, arguing that the plan would increase the federal deficit by about $10.8 billion while saving motorists only about $25 per person.

Cantwell said an important step was taken Thursday when the Federal Trade Commission began taking public comment on rules barring oil price manipulation and deception in the markets.

"You want to send a message right now that manipulation is not going to be tolerated," she said at a Capitol Hill news conference. "That's the best way to see short-term action on oil prices."

Some economists believe that at least 20 percent of the price of oil "has nothing to do with supply and demand" but rather is due to market manipulation by speculators, said Michael Greenberger, a University of Maryland law professor who appeared with Cantwell.

Meanwhile, the retail price of gas fell slightly Friday, according to a survey by AAA and the Oil Price Information Service — the first time in 18 days the price has not set a new record.

Cantwell said the FTC action could have served as a warning shot to speculators.

Bingaman said consumers, as well as government, have a role to play.

Motorists can reduce gasoline consumption by driving 5 miles per hour slower, which would increase fuel efficiency by about 7.5 percent, he said. He said properly inflated tires increase fuel efficiency by about 4 percent, and regular car maintenance can increase fuel efficiency by about 2 percent.