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High gas prices become a political hot potato in US

High gasoline costs and the political fallout they may create are producing a flurry of proposals from both Republicans and Democrats aimed at soothing motorists' anger.

But nobody is predicting prices will ease anytime soon.

Democrats are blaming Republicans, especially US President George W. Bush, while Republicans argue that congressional Democrats have stood in the way of more domestic oil production.

Bush directed his environmental agency on Tuesday to stand ready to ease clean air rules if they interfere in gasoline supplies this summer. Industry analysts said that likely would have only a marginal influence on prices.

The president also announced that the government would not take 10 million barrels of oil out of the market for the US emergency reserve as had been planned.

Bush maintained that "every little bit helps," even though industry analysts said that was so little oil it would have no impact on prices.

The president expressed frustration at his inability to force down prices.

"What people are seeing at their gasoline pumps reflects the global economy in which we live," he acknowledged in a speech aimed at countering critics who have accused him of being soft on oil companies and ignoring high prices at the pump.

Bush vowed to pursue any collusion or price gouging and directed the Justice Department to help states pursue allegations that "gas prices have been unfairly manipulated."

But the White House opposes additional federal laws to address price gouging or strengthen antitrust laws as they pertain to oil companies, as some members of Congress have proposed.

"There are very good laws on the books," said Al Hubbard, the president's chief economics adviser. "What's important is that those laws are enforced aggressively."

Bush also urged Congress to repeal US$2 billion in oil industry tax breaks over 10 years, declaring, "Taxpayers don't need to be paying for certain of these expenses on behalf of the energy companies."

But he said he was opposed to price controls or a windfall profits tax on oil companies.

"These plans have not worked in the past," he said.

Democrats quickly countered with their own proposals, including a renewed call for taxes on oil industry profits and for a 60-day "holiday" from the US$0.0184 a gallon (US$0.0486 a liter) federal gasoline tax.

Democratic Senator Robert Menendez said the tax suspension would provide "immediate relief" of US$100 million a day to motorists.
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