Prices fueling debate

Soaring gasoline prices are taking a bigger bite out of consumer incomes, though pollsters say they are not yet a major election-year issue for voters.

“Elections are not won or lost by gas prices,” says pollster John Zogby. “If things generally seem to be going in the right direction but gas prices are high, that’s not going to bust up a presidency.” In fact, gas prices didn’t rate when Mr. Zogby recently polled Americans about their leading concerns.

“Gas prices are important to people, but the mix of issues that people are presently dealing with are just more important, especially jobs, health care, education and the security and safety of the country,” says GOP pollster David Winston. “But if prices continue to rise, its importance will increase and that will bring the whole energy issue front and center again.”

And rise they will, pushing up prices for just about everything we buy, say business economists. “My hunch is that in the not-too-distant future we will all feel and see this at the supermarket or at the mall — 80 percent of everything is delivered by truck,” says Bruce Josten, the U.S. Chamber of Commerce’s chief lobbyist. “We are going to pay more.”

The White House has been watching the issue closely as gas prices have approached or passed $2 per gallon in many parts of the country, and will likely rise higher this summer when the presidential race rounds the critical homestretch. That has Republican strategists plotting a “put-up-or-shut-up” vote on domestic oil exploration in the coming months as administration officials increase pressure on the Organization of Petroleum Exporting Countries to raise production quotas to reduce world oil prices, the biggest factor in high gasoline pump prices.

The average price of regular gasoline hit nearly $1.79 last week, up more than 10 cents from a year ago, according to the Energy Information Administration. But prices vary from state to state, and are especially severe in key battleground states critical to President Bush’s re-election prospects.

A gallon of regular gas in Michigan was averaging $1.78. It was $1.74 in Ohio, $1.70 in New Hampshire, $1.74 in Pennsylvania, $1.82 in Wisconsin, $1.80 in Florida and $1.88 in Washington state. In California, which has the most restrictive environmental regulations in the country, gas was more than $2.15 a gallon. In Nevada, $2.06.

Mr. Bush’s home state of Texas, where regulations are minimal, offers gas at $1.65 per gallon. In Oklahoma, another big oil state, it’s $1.61.

In many areas, we already see the start of those price increases in the 0.5 percent rise in March’s consumer price index — the biggest monthly increase since November 2001. That has stirred fears on Wall Street that the Fed will raise interest rates to keep inflation at bay. No doubt the Fed will eventually raise rates from their 40-year low, but I doubt we’ll see any changes for the rest of this year — not until unemployment no longer is an issue.

Meanwhile, John Kerry has been urging Mr. Bush to “jawbone” the OPEC countries to get them to lower crude oil prices, which have jumped from $27 a barrel to $38. But a senior administration official tells me, “We are in constant talks with OPEC officials.”

Other factors causing gas prices to rise are not mentioned by Mr. Kerry for fear of alienating his environmental supporters. We have not built a new, large-scale gas refinery in this country in 25 years. A costly bureaucratic web of environmental rules needlessly requires 18 different grades of gas on a state-by-state basis. Then there’s the added cost of a new low-sulfur gas under the Clean Air Act that will push prices higher still.

Mr. Bush came into office with a plan to make us more energy independent by expanding domestic drilling for oil, as Ronald Reagan did in the 1980s. According to government research, we have lots of oil in the Arctic National Wildlife Refuge and other public lands that can be extracted with no harm to the environment, but Mr. Kerry and his friends killed the idea in the Senate — voting against ANWR drilling.

If the issue heats up, Republican leaders plan to bring up the ANWR oil production proposal again, forcing Mr. Kerry and other drilling opponents to vote it up or down. “Here’s a supply-side way to make us less dependent on foreign oil and to reduce oil prices, too,” says a top administration official. “It will be a put-up-or-shut-up vote aimed at Kerry.”

We’ll see if the senator can double-talk his way out of that.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.