A report today that gasoline prices soon could reach a record $4.25 a gallon provides fuel for Republican plans to attack President Barack Obama on the issue.
Gasoline prices never have been higher at this time of the year, with a 25 percent increase just since Jan. 1 putting the national figure at $3.53 a gallon, compared with the $1.89 gas cost when Obama was inaugurated. And experts say they could reach a record $4.25 by late April, according to the new report
The Oil Price Information Service says the projected wallet-busting $4.25 a gallon would top the previous record of $4.11 in July 2008. The national average for gasoline began the year at $3.28 a gallon. The $3.53 price point now is up from $3.17 a gallon last February, a record at the time. In 2007, before the recession hit, the average for February was $2.25 a gallon.
Republicans are marshaling their forces to make the price explosion an election issue, and in turn, the White House is preparing a counterattack, according to The New York Times
Republican presidential candidate Newt Gingrich raised the issue several times last week, stressing the need about opening up more federal land to oil and gas drilling as a path toward U.S. energy independence — and lower pump prices.
Gingrich wrote on Twitter on Friday that “gasoline prices are unacceptable. We can do better!” He urged his supporters to sign a petition on his website calling for a return to $2.50-a-gallon gas. “Drill here. Drill now. Pay less,” the petition says.
The issue is hard for Obama to duck, with the ballooning prices taunting voters on gas station signs at every street corner.
Indeed, as the president’s motorcade whisked him through scenic Orange County, Calif., on Thursday en route to a California fundraiser where he raised millions for his campaign and the Democratic Party, it passed a protester toting a sign proclaiming: “Gas prices up 91 percent under Obama.”
The Times story reinforced other media reports about House Speaker John Boehner’s instructions to other Republicans to stoke anger over pump prices during trips home to their constituents for the Presidents Day recess.
“This debate is a debate we want to have,” Boehner told his conference during a closed-door meeting last week, according to an aide. “It was reported this week that we’ll soon see $4-a-gallon gas prices. Maybe higher. Certainly, this summer will see the highest gas prices in years. Your constituents saw those reports, and they’ll be talking about it.”
Obama’s advisers fear that the ballooning gas prices will undermine the president’s argument that the economy is improving, according to the Times report.
“White House officials are preparing for Republicans to use consumer angst about the cost of oil and gas to condemn his energy programs and buttress their argument that his economic policies are not working,” according to the Times.
Higher gas prices trickle down to clamp other consumer spending and could curtail the recent improvement in the U.S. economy.
A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion, The Associated Press reported, adding, “That's only 0.2 percent of the total U.S. economy, but economists say it's a meaningful amount — especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession.”
Iran’s saber-rattling about plugging the global oil trade has increased the price of a barrel of domestic oil to more than $103, a six-month high and a rise of about 34 percent since September. That has propelled the increasing pump prices, which already are approaching $4 in some spots.
Although the Times notes that the oil price presents just a modest drag on the economy, it observes that a large jump, along with tensions over Iran and continuing European debt worries, could challenge America’s economic recovery.
GOP candidates contend that increasing prices are part of the Obama administration’s playbook.
“They want higher energy prices. They want to push their radical agenda on the public,” Rick Santorum said at a campaign event, slamming Democrats for pushing alternatives to oil. “We need a president who is on the side of affordable energy.”
The Republican National Committee’s weekly talking points often include rising gas prices among the “Top Line Messaging” for the week. “A recent “Pundit Prep” document cited the national debt, unemployment, and gasoline prices as the three best ways to define the ‘Obama economy,’” the Times reported.
Obama aides are preparing for the onslaught.
“The president is keenly aware of the impact that higher gas prices have on families trying to make ends meet,” White House press secretary Jay Carney said last week.
To counter Republican attacks, Obama’s re-election team in Chicago plans to highlight, among other things, GOP presidential candidate Mitt Romney’s raising gas taxes when he was governor of Massachusetts. “And Obama’s Democratic allies on Capitol Hill are eager to renew a nationwide discussion about tax subsidies to oil companies,” the Times reported.
“House Republicans are very good at using every argument they can to shield oil companies from paying their fair share,” Rep. Steve Israel of New York, chairman of the Democratic Congressional Campaign Committee, told the Times. “They have been relentless and fearless protectors of oil company profits.”
Also in Obama’s counterattack are plans to focus his speeches increasingly on his administration’s actions to raise the fuel efficiency of cars and to open new areas to oil and natural gas development, the Times reported, adding that Team Obama hopes “the moves would counter the accusation that he has stifled oil production.”
Republicans told the Times they are eager to criticize the president as gas prices rise, in part with legislation aimed at increasing domestic production.
“They also plan to use Mr. Obama’s decision to block the immediate construction of Keystone XL, a 1,700-mile pipeline that would stretch from Canada to the Gulf Coast. A Republican bill was passed by the House on Thursday to expand offshore drilling and force a permit to be approved for the pipeline,” according to the Times.
Meanwhile, people are expected to curb travel because of the high prices, perhaps saving up to drive to the polls to vote against Obama.
"You're going to see a lot more staycations this year," says Michael Lynch, president of Strategic Energy & Economic Research. "When the price gets anywhere near $4, you really see people react."
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