Feeling election-year heat from consumer pain at the pump, President Obama on Tuesday called for a new regulatory crackdown on oil speculators, including stiffer penalties for market manipulation and more resources and tools for enforcement.
The White House proposal is designed to act as a deterrent to illegal manipulation of the energy market, which Mr. Obama and other Democrats repeatedly have said is at least partially responsible for high gas prices.
Mr. Obama urged Congress to act quickly to fund the $52 million proposal Tuesday.
“We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher — only to flip the oil for a quick profit,” Mr. Obama said at the White House with Attorney General Eric H. Holder Jr. at his side. “We can’t afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick. That’s not the way the market should work.”
Before the official announcement, senior administration officials were careful not to estimate the effort’s immediate impact on prices at the pump, nor did they point to any hard evidence of illegal oil speculation, deferring questions about possible market manipulation and any open cases to the Justice Department.
“I don’t think you’ll find any of us speculating about prices one way or another,” a senior administration official told reporters during a briefing preceding Mr. Obama’s official announcement, referring to the president’s previous statements that multiple factors, including instability in the Middle East, play into gas prices.
Despite his presence by the president’s side during the Rose Garden announcement, Mr. Holder did not make any remarks.
In pushing for additional regulations on Wall Street, Mr. Obama is clashing with Republicans, who already are trying to unravel some of the limits placed on banks and financial services companies amid the global economic crisis they regard as stifling economic development.
Presumptive GOP presidential nominee Mitt Romney said Mr. Obama’s “government by gimmick” had reached a new low with this effort to crack down on oil speculation.
“While American families struggle to pay gas prices that have doubled on his watch, the president’s only solutions are to target oil and gas producers for higher taxes and now to dramatically increase federal regulation,” Mr. Romney said. “These policies will do nothing to reduce energy prices, expand domestic production or strengthen the American economy.”
The Republican National Committee argued that Mr. Obama has run out of ideas when it comes to dealing with soaring oil and gas prices. Instead of trying to open more federal land to drilling and find a concrete supply-side way to address the problem, the president is trying to blame Wall Street, they said.
“Barack Obama must believe the American people can be fooled into thinking he actually has an energy policy,” RNC spokesman Joe Pounder said. “Unfortunately, Obama’s plan to get headlines isn’t an energy policy to bring down gas prices.”
“President Obama is once again trying to change the subject and blame something other than his failed energy policies for the skyrocketing price of gasoline,” said Rep. Doc Hastings, Washington Republican and chairman of the House Natural Resources Committee. “His solution is more regulation, when in fact it’s his regulations that are stifling production.”
The White House plan would increase sixfold the surveillance and enforcement staff at the Commodity Futures Trading Commission, improve technology to help investigators monitor energy markets, and impose dramatically stiffer civil and criminal penalties against companies that engage in market manipulation, from $1 million to $10 million each day they are in violation.