American families have been alarmed by surging prices of food and fuel as the nation emerges from the coronavirus pandemic, and of course Republicans have been piling the blame on President Joe Biden, even as they sabotage attempts to bring inflation under control.
After the stimulus of the $1.9 trillion American Rescue Act in March 2021 spurred the US economy to grow 5.7% in 2021, the fastest annual clip since 1984, Republicans managed to block any further assistance for working families of the US, and the economy shrank 1.4% in the first three months of 2022, according to the Bureau of Economic Analysis.
European economies were estimated to have grown 5.2% last year, but surging energy prices are posing a growing problem for Europeans economies, as new figures showed on May 20 that inflation in the euro zone increased to 7.5% in May, the highest level on record, while economic growth weakened to 0.2%.
In the US, the Consumer Price Index for urban consumers increased 0.3% in April, an improvement from the 1.2% increase in March, but it still left an 8.3% increase over the previous 12 months.
Most of the inflated costs can be attributed to the break in supply chains as the economy emerged from the pandemic.
Food prices are up 9.4% over the past year but gasoline prices spiked 43.6%, blowing well past the $4-a-gallon barrier, However, the US still ranks in the middle among nations in gasoline costs.
When Biden placed a ban on imports of Russian oil, gas and coal March 8 as a response to Russia’s invasion of Ukraine, the average gas price at US pumps hit $4.17 and he predicted the ban would cause gas prices to rise further. By May 22, the average price of a gallon of regular gasoline was $4.593, according to AAA, but the US ranked 85th out of 170 countries tracked by GlobalPetrolPrices.com. Gas prices range from the least expensive (Venezuela at 8.4 cents a gallon) to the most expensive (Hong Kong at $10.966 a gallon). The average price of mid-grade (95 octane) gas was $7.04, while the average price for mid-grade in the US was $4.664..
House Minority Leader Kevin McCarthy, R-Calif., replied, “Democrats want to blame surging prices on Russia. But the truth is, their out-of-touch policies are why we are here in the first place. Remember what happened on Day 1 with one-party rule? The president canceled the Keystone pipeline, and then he stopped new oil and gas leases on federal lands and waters.”
Senate Minority Leader Mitch McConnell, R-Ky., warned, “This administration wants to ramp up energy imports from Iran and Venezuela. That is the world’s largest state sponsor of terror and a thuggish South America dictator, respectively. They would rather buy from these people than buy from Texas, Alaska and Pennsylvania.”
First, we think if Saudi Arabia is an acceptable trading partner, the US can risk importing Venezuelan oil at reasonable prices and encourage Iran to supply our European allies.
In the early months of 2020, when the virus took hold, demand for gas dried up and prices plummeted. The benchmark price for crude oil in the US fell to negative $37.63 that April, so producers in the US and around the world began cutting their output. The average price of gas in April 2020 fell to $1.938.
As pandemic restrictions loosened and economies recovered, demand outpaced supply. OPEC Plus, an alliance of oil-producing countries that controls about half the world’s supply, chose to limit increases in production, according to the US Energy Information Administration. Domestic production also has remained below pre-pandemic levels, as oil companies have taken advantage of the increased demand for fuel, which has increased the prices at the pump.
The Keystone XL pipeline, which would have expanded an existing system transporting heavy tar sands oil from Canada to Gulf Coast refineries, has been a political and environmental battleground since it was proposed in 2008. The Obama administration denied a construction permit for the company behind it, TransCanada, in 2015. The Trump administration approved the permit in 2017, but the project stalled in the courts. By the time Biden rescinded the permit on his first day in office, just 8% of it had been built.
However, even if Biden had greenlighted XL and TransCanada, now known as TC Energy, won its court battles, the pipeline wouldn’t be operational today. The company estimated in March 2020 that it might enter service in 2023. And even if the pipeline were completed, most of the oil likely would be shipped overseas.
Claims about the Biden administration stopping oil and gas leases also are Republican disinformation.
Biden temporarily halted new drilling leases on federal lands in January 2021, but a federal judge blocked that move last June. In its first year, the Biden administration actually approved 34% more permits than the Trump administration did in its first year, according to the Center for Biological Diversity, an environmental group. (And environmental defenders didn’t like it.) But those permits could take years to actually result in oil or gas production.
Democrats in Congress, with the Consumer Fuel Price Gouging Prevention Act (HR 7688), have proposed to give the Federal Trade Commission the power to penalize oil companies if the government can prove they are inflating the price of gasoline. House Energy and Commerce Chair Frank Pallone, D-N.J., noted that Shell PLC made a record $9 billion in profits during the first quarter of 2022 and Exxon Mobil Corp. saw profits increase by $5.4 billion. “They are purposely keeping production low in order to keep prices and their profits high,” Pallone said.
House Minority Whip Steve Scalise, R-La., circulated talking points describing the bill as a “socialist price fixing act.”
“This bill is an attempt by the Democrats to distract and shift blame from the administration’s self-inflicted energy and inflation crisis and blame energy producers, despite no evidence of price gouging,” the talking points said, regardless of actual evidence.
The Consumer Fuel Price Gouging Prevention Act passed the House 217-207 May 19 without any Republican support.
Another bill to check price-gouging is the Big Oil Windfall Profits Tax Act (HR 7061), sponsored by Rep. Ro Khanna, D-Calif., which has yet to come up for a vote. Under Khanna’s bill, which is a companion to a similar bill introduced by Sen. Sheldon Whitehouse, D-R.I., “large oil companies that produce or import at least 300,000 barrels of oil per day (or did so in 2019) will owe a per-barrel tax equal to 50% of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019,” according to a press release.
Under the Big Oil Windfall Profits Tax Act, consumers who’ve missed the chance to benefit from Big Oil’s financial gains would be issued quarterly rebates generated from the taxes levied on fossil fuel companies. The rebates would apply to individuals making up to $75,000 annually or up to $150,000 for joint filers.
Both bills likely will be blocked by Republicans in the Senate, as the fascists hope unrest caused by inflation will put them back in control of the House and Senate after the midterm elections in November. Until then, any attempt by Democrats to control inflation will be condemned by Republicans as socialism. — JMC
From The Progressive Populist, June 15, 2022
Blog | Current Issue | Back Issues | Essays | Links
About the Progressive Populist | How to Subscribe | How to Contact Us
Copyright © 2022 The Progressive Populist
No comments:
Post a Comment