Hello, I'm Mark Pearson. Concerns over the impact of higher fuel prices notwithstanding, government reports this week indicate a rapidly expanding U.S. economy. **According to the Commerce Department, Gross Domestic Product, the broadest measure of economic activity, grew at annual rate of 4.8 percent in the 1st quarter of 2006... more than twice the rate of the previous quarter. **A growing economy is in evidence at the plant, as well, where orders to factories for durable goods rose three-tenths of one percent in March. The gain was the fourth in the past five months. **And the Conference Board reports its April measurement of Consumer Confidence rose to its highest level in nearly four years. The private research group warned, though, that rising fuel prices will have a cooling effect on the U.S. economy. Politicians know that as well. And with the mid-term elections now just seven months away, Congress and the Bush administration proposed numerous initiatives this week hoping to reduce the price at the pump.
In a speech to the Renewable Fuel Association this week, Bush offered a four-point plan to reduce the pain at the pump.
President Bush:"Americans understand that the price of crude oil is going up but what they don't want and will not accept is manipulation of the market and neither will I."
Bush is calling on the federal trade commission to investigate the possibility of unfair price manipulation. The president also ordered a temporary halt to oil deposits destined for the nation's strategic petroleum reserve. However, critics of Bush's plan to halt oil deposits claim the move will NOT affect gas prices.
Another White House proposal includes revoking $2 billion in tax breaks for oil companies. The tax breaks are part of an omnibus energy bill signed into law by the President last August.
On Capitol Hill, Senate Republicans are suggesting a $100 fuel-cost rebate for millions of taxpayers. Democrats countered that the $100 gas rebate proposal is coupled with a renewed call for oil drilling in the Alaskan Wildlife Refuge, a provision that likely will sink the bill. Instead of gas rebates, Democrats offered their own plan to suspend the 18.4 cent federal gasoline tax for two months.
Yet another plan drafted by Democratic Sen. Byron Dorgan of North Dakota is calling for a windfall profits tax on oil companies. Dorgan's plan comes at a time when the Exxon Mobil Corp. is posting 1st quarter profits of $8.4 billion -- the 5th largest quarterly profit for a public company in history. While Exxon executives claim the company has no control over rising prices, some politicians in Washington disagree.
Sen. Robert Menendez,(D) New Jersey: "Last year the big oil companies hiked gas prices and blamed an act of god. But it's crystal clear that the current spike in gas prices is at least partly due to an act of greed."