Senior advisers to President Bush said on June 20 that his
administration has no short-term plans to address high gasoline
prices, such as suspending the federal tax on the fuel.
"We tend to favor long-term rather than short-term solutions"
to energy challenges, Edward Lazear, chairman of the Council of
Economic Advisers, told reporters at a White House briefing.
Lazear added that a suspension of the 18.4¢-per-gallon tax would
likely increase demand and lower federal revenue.
Instead, the White House wants to focus on a plan introduced
by Bush earlier this year to address energy prices by gradually
raising Corporate Average Fuel Economy standards, increasing
supplies of renewable and alternative fuels to displace
gasoline, expanding access to energy resources on federal lands
and doubling the size of the Strategic Petroleum Reserve, added
Al Hubbard, Bush's assistant for economic policy.
Lazear attributed about two-thirds of the US retail gasoline
price increase this spring to a "scarcity of refinery capacity"
caused by unexpected outages and scheduled refinery repairs. He
added that Congress should encourage refineries to expand
capacity.
Hubbard and Lazear reiterated White House opposition to a
number of provisions in a Senate energy bill (H.R. 6). They said
they would recommend that the president veto any bill containing
provisions opening foreign oil suppliers to antitrust claims in
US courts and setting criminal penalties for gasoline
"price-gouging," as the Senate bill does.
Lazear said the price gouging provision was vague and, in
effect, acted as a "price control" that was "legally ambiguous"
and could lead to shortages and higher prices.
The senior economic advisers also blasted House and Senate
bills that "single out" the oil industry for additional taxes.
"This president believes in cutting taxes, not raising taxes,"
Hubbard said.
