- Biden has little choice but to cut gas prices and prevent political annihilation.
- He made a big bet by smashing Exxon and traveling to Saudi Arabia next month.
- “Asking MBS for oil will not reduce gas prices,” California spokesman Ro Han said in an interview.
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President Joe Biden began political annihilation within months.
The rise in oil and gas prices threatens to deal a decisive defeat for Democrats in the interim terms in November. The average for a gallon of regular gasoline rose above $ 5 last weekend for the first time. This is a 10% jump from a month ago, reflecting huge consumer demand, which is outpacing available oil supplies, combined with severe aftershocks in Ukraine’s energy markets since the war.
The bleak political outlook for the White House was complicated by a report on inflation that turned out to be worse than many economists had expected. It shows that the prices of food, airline tickets and rent are rising at their fastest pace in four decades. Since then, Biden has redoubled his promise to fight rising prices and make it a top domestic priority.
But the rise in gasoline prices is at the heart of the current inflationary spiral. This is burdening businesses with higher bills for electricity, air travel and shipping, raising prices everywhere for Americans. There seems to be little room for the White House to reverse the supply crisis. It is already committed to releasing one million barrels a day from the strategic oil reserve in May, easing ethanol fuel regulations and trying to unclog ports.
“President Biden is basically using the full range of tools available,” Jonathan Elkind, a senior researcher at Columbia University’s Center for Global Energy Policy, told Insider. “It seems to me that the Biden administration has done a lot of things that make sense.”
But these moves failed to provide relief for the pump, and this led Biden to make a big bet with rising gas prices, with no end in sight. He blamed Exxon and other major oil companies for making huge profits in a letter, signaling a more aggressive approach against the sector, which he called for a rapid increase in production.
He is ready to meet with Saudi Crown Prince Mohammad bin Salman in July, although he has vowed to turn Saudi Arabia into an international party over the assassination of Jamal Hashoghi, a prominent critic of the Saudi royal family and journalist living in the United States.
It remains to be seen whether prosecuting one fraudster in the form of Big Oil and reconciling with another in the form of a dubious ally will be enough to intervene in gas prices and prevent Democrats from losing one or both houses of Congress this fall. .
Democrats do not feel comfortable turning to Saudi Arabia for more oil
Senator Debbie Stabenov (D-MI), Senator Ron Widen (D-OR), Senate Majority Leader Chuck Schumer (D-NY) and Commerce Secretary Gina Raimondo attend a press conference on supply chain issues. Joshua Roberts / Getty Images
The possible image of Biden shaking hands with a Saudi leader reportedly the mastermind of Hashoghi’s assassination is enough to provoke concern and criticism among his Democratic allies.
Virginia Sen. Tim Kane told the Insider he considered the meeting a “bad idea”, adding that his “intuition” was that the president’s trip was at least partly aimed at urging Riyadh to step up oil production.
“Asking MBS for oil will not reduce gas prices,” California spokesman Ro Hanna, a prominent progressive in the House of Representatives, told Insider. He added that Biden must create preconditions such as insisting that the Saudi government lift its devastating blockade of Yemen.
“I see very little evidence that the Saudis will cut gas prices,” Oregon Sen. Ron Wyden said Wednesday. “I see a lot of evidence of their horrific human rights violations.”
Riyadh has very limited opportunities to increase oil production – known as “spare capacity” – and analysts say that even if Saudi Arabia pumps more crude oil, it may still fail to reduce the jump in gas prices. “It’s not like throwing a key,” Elkind said. “It’s not like it’s going to affect things right away.”
Some are urging the Biden administration to think outside the box. Skanda Amarnat, executive director of the left-wing Employ America think tank, says the federal government must briefly guarantee demand for oil producers, among other administrative maneuvers, and prioritize clean energy initiatives in the long run.
“It feels bad for Democrats to talk about doing things that are appropriate for the industry,” Amarnat told Insider. “But there are actually things that, if done right, will prevent oil prices from collapsing and this boom-bust cycle.”
“There is nothing for the president to control less than gas prices”
Gas prices are the highest in history, exceeding $ 6 in California. Rich Pedroncelli / AP
Experts say the White House is almost at the mercy of rocking global energy markets, severely disrupted by the war in Ukraine. “There is nothing that the president can control less than gas prices and nothing that people want him to control more than gas prices,” Jason Furman, a former top economist in the Obama administration, told Insider.
Democrats in Congress are struggling to hold on to their weak majority. Republicans are beating Democrats like liberals for taxes and spending, which exacerbated inflation with the stimulus law last year and stifled domestic energy production.
Some Democrats accuse the big oil companies of making huge profits at the expense of Americans who are being squeezed by the gas station. Widen will unveil a plan that will impose an additional 21% tax on oil companies on profits that are considered excessive, along with taxing companies that buy back their shares.
“You have that Big Oil is doing extremely well under the federal tax code at the expense of the consumer,” Wyden told Insider, adding that he believes his measure will “connect” with people. Separate polls by the Groundwork Collaborative and The Washington Post show that a majority of voters blame oil companies for trying to take advantage of rising gas prices.
“Profits are four times higher than before the war in Ukraine,” said Lindsay Owens, executive director of Groundwork Collaborative, who conducted an in-depth study on the subject. “The leaders of the oil company bring huge profits and brag about it to shareholders when calling for profits.”
Sensors Bernie Sanders of Vermont and Sheldon Whitehouse of Rhode Island have also released their own contingency tax proposals. They are modeled on recently established programs in Italy and the United Kingdom, providing checks to the poorest families.
The Biden administration has also left the door open for a tax on contingencies. But some liberal and conservative economists have criticized unforeseen taxes as potentially inflationary and detrimental to efforts to increase crude oil production.
“The Wyden plan will be partly passed on to consumers in the form of higher prices and will discourage production,” Furman said. “That’s not the right approach.”
“I think the fact that the Biden administration is paying a tax on unforeseen profits or saying it will consider it shows that they are in a transfer of blame regime, not a real constructive one,” said Donald Schneider, deputy chief of staff. U.S. policymaker Piper Sandler and a former Republican aide in the House of Representatives told Insider.
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