Obama wants Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions.
“We can’t afford a situation where some speculators can reap millions while millions of American families get the short end of the stick,” Obama said at the White House.
The plan is more likely to draw sharp election-year distinctions with Republicans than have an immediate effect on prices at the pump. The measures seek to boost spending for Wall Street enforcement at a time when congressional Republicans are seeking to limit the reach of federal financial regulations.
The president’s $52 million proposal comes as Republicans have been hammering Obama on his energy policies, recognizing the political cost of high gas prices. Obama’s plan would turn the tables on Republicans by taking aim at Wall Street’s role in the oil price chain.
The president didn’t shy away from casting the issue in partisan terms, drawing attention to Republican opposition to a plan to end tax breaks for oil and gas companies.
Even before the White House announced Obama’s plans, House Speaker John Boehner called it a political ploy and criticized the president for not using authority he already has to deal with such problems.
“The president has all the tools available to him if he believes that the oil market is being manipulated,” Boehner told reporters Tuesday. “Where’s his Federal Trade Commission? Where is the SEC? He’s got agencies there. So instead of just another political gimmick, why doesn’t he put his administration to work to get to the bottom of it?”
The Securities and Exchange Commission’s duties include regulating markets.
Senior administration officials who put together the proposal would not go as far as to say that market manipulation is responsible for rising gas prices, but the officials said they wanted to curtail the ability of speculators to take unlawful advantage of oil price volatility. The officials spoke on the condition of anonymity to discuss details of the plan.
“None of these steps by themselves will bring gas prices down overnight,” Obama said. “But it will prevent market manipulation and make sure we’re looking out for American consumers.