Democratic leaders in both chambers on Thursday took aim at the nation’s largest oil companies, accusing the industry of adopting “price gouging” tactics that have led directly to the spike in gas prices around the country.
Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles Schumer (D-N.Y.) vowed to move swiftly in the coming weeks to vote on legislation empowering the government, at both the state and federal level, to put new curbs on the industry for the purpose of reducing costs at the pump.
Since oil companies are reporting enormous profits, the Democrats argue, they can easily afford to pass the gains on to consumers instead of shareholders — particularly amid Russia’s invasion of Ukraine, which has only exacerbated the volatility of global fuel markets.
“They are hoarding the windfall while keeping prices high for people at the pump,” Pelosi said during a press briefing in the Capitol. “In this time of war — in any time — there is no excuse for big oil companies to profiteer, to price-gouge or exploit families.”
The Democrats’ legislation would grant new authority to both the Federal Trade Commission (FTC) and state attorneys general to scrutinize the methods by which fuel prices are set, at both the wholesale and retail level. The new authority would include powers to slap civil penalties on those companies found in violation.
The proposal is moving through both chambers, led by Sen. Maria Cantwell (D-Wash.), who heads the Senate Commerce committee, and Rep. Frank Pallone (D-N.J.), chairman of the House Energy and Commerce panel.
“We know that energy markets can be manipulated,” said Cantwell, who pointed to the Enron scandal as a leading example. “We need to make sure that there is a policeman on the beat.”
The FTC has “some authority now,” she added. “But they need more tools.”
Thursday’s announcement is likely to disappoint a growing number of Democratic lawmakers, including those facing tough reelections in November, who’ve pressed party leaders to endorse a federal gas tax holiday as a means of lowering prices at the pump.
The issue has become an increasing liability for the Democrats, who control the White House and both chambers of Congress, and are scrambling to fend off attacks from Republicans blaming President Biden for the inflationary trend.
Yet Democratic leaders have rejected tax holiday, warning that there’s no way to guarantee the oil companies would pass that savings along to drivers.
“The pros of it are that it’s good PR,” Pelosi said. “The cons are that there’s no guarantee that the savings — the reduction in the federal tax — … would be passed on to the consumer.”
Pelosi also noted that, because such a tax holiday would reduce revenues intended for highway maintenance, Congress would be faced with the additional burden of coming up with budget offsets to cover the shortfall.
Party leaders said they’re also willing to take a look at another cost-cutting proposal, which would empower the United States to sue OPEC over anti-trust violations.
“Obviously OPEC is a problem,” Schumer said. “But the No. 1 problem, where we’d have the best effect, the quickest effect, and the most focus is what we’re talking about today.”
Schumer suggested that leadership’s strategy to focus on the oil companies was poll-tested.
“If you ask the American people, in all the survey data, what is causing the increase in gas prices, number one is market manipulation and Big Oil not giving a break,” he said. “That is what we’re focusing on.”
On the question of timing, Pelosi said the Senate bill is “pretty much done,” and the House proposal isn’t far behind. Pallone’s committee will be considering the House version during next week’s House recess, she said, with designs to bring it to the floor shortly afterwards.
“Ours has a little more to be done in the course of the next week,” she said. “We would hope to have all of this done pretty soon.”
The idea of adopting tougher, new regulations on the oil industry, however, is almost certain to meet fierce opposition from Republicans in both chambers, raising immediate doubts about whether Cantwell’s bill can win the 60 votes needed to defeat a GOP filibuster in the Senate.
Pelosi predicted the public outcry over the high cost of gas would force at least some Republicans to jump on board, if only for fear of being seen doing nothing to help struggling consumers.
“If the Republicans stand in the way of us feeling the consumer of the stranglehold of Big Oil, you think they’re going to blame that on the Democrats?” she asked.
“When the bills hit the floor,” Schumer added, “the Republicans will face a dilemma.”