Rising gasoline prices, trumpeted in foot-tall numbers on street corners across the country, are causing concern among advisers to President Obama that a budding sense of economic optimism could be undermined just as he heads into the general election.
White House officials are preparing for Republicans to use consumer angst about the cost of oil and gas to condemn his energy programs and buttress their argument that his economic policies are not working.
In a closed-door meeting last week, Speaker John A. Boehner instructed fellow Republicans to embrace the gas-pump anger they find among their constituents when they return to their districts for the Presidents’ Day recess.
“This debate is a debate we want to have,” Mr. Boehner told his conference on Wednesday, according to a Republican aide who was present. “It was reported this week that we’ll soon see $4-a-gallon gas prices. Maybe higher. Certainly, this summer will see the highest gas prices in years. Your constituents saw those reports, and they’ll be talking about it.”
Iran’s recent warnings of a disruption in the global oil trade have pushed the price of a barrel of domestic oil to more than $103, a six-month high and up about 34 percent since September. That has helped drive the average price of a gallon of regular gasoline in the United States to $3.52, a 30-cent increase in the past two months. It is already approaching $4 in some places.
Modest drag at this point
Economists say the current price of oil is only a modest drag on the economy. But a big jump — combined with tensions over Iran and continuing European debt worries — could present a more significant challenge to America’s recovery, they say.
For the president’s economic team, the specter of such increases in oil prices comes on the heels of positive economic news that has lifted Mr. Obama’s approval rating, including better-than-expected job growth, a surging stock market and a payroll tax deal that will put more money in the pockets of millions of Americans.
But Mr. Boehner’s message to his members echoes the aggressive talk coming from the Republican campaign trail, where the men vying for the right to challenge Mr. Obama are increasingly blaming Mr. Obama’s administration for rising gas prices. A gallon of gas had dropped to $1.89 when Mr. Obama took office in 2009, in large part because of the fall in oil demand caused by the financial crisis, and has almost doubled since.
“They want higher energy prices. They want to push their radical agenda on the public,” Rick Santorum said at a campaign event last week, accusing Democrats of pushing alternatives to oil. “We need a president who is on the side of affordable energy.”
Newt Gingrich wrote on Twitter on Friday that “gasoline prices are unacceptable. We can do better!” He urged his supporters to sign a petition on his Web site calling for a return to $2.50-a-gallon gas. “Drill here. Drill now. Pay less,” the petition says.
And talking points from the Republican National Committee that go out to conservative commentators every Friday often include rising gas prices among the “Top Line Messaging” for the week. A recent “Pundit Prep” document cited the national debt, unemployment and the price of gas as the three best ways to define the “Obama economy.”
The president’s political advisers are bracing for battle as they envision the price of gas rising steadily through the summer, as it usually does. As the president’s motorcade whisked him through scenic Orange County on Thursday on the way to a California fund-raiser, one sign held by a protester read, “Gas prices up 91 percent under Obama.”
Aides say they know the attacks are inevitable. But they also say they are prepared to respond forcefully with a defense of the president’s energy policies and a critique of the Republican line.
“The president is keenly aware of the impact that higher gas prices have on families trying to make ends meet,” Jay Carney, the White House press secretary, said last week.
For Mr. Obama’s economic team, the increase in oil prices is an unwelcome reminder of how global events largely outside their control can hamper a recovery. For the third year in a row, a modest recovery faces head winds as winter turns to spring.
In the spring of 2010, debt crises in Europe, slowing stimulus spending and weakness in the housing market brought an abrupt halt to a brief turnaround in the United States economy. A year later, turmoil in the Middle East, the earthquake and tsunami in Japan and more debt problems in Europe did the same. Now, rising gasoline prices, concern over tensions with Iran and, once again, European debt are causing worries.
On a call with reporters on Friday, Alan B. Krueger, the chairman of the president’s Council of Economic Advisers, said rising oil prices threatened to eat into household budgets and sap confidence — as they did last year. But he said the agreement to extend last year’s payroll tax cut would help.
“The payroll tax cut provides some cushion for families in case they see their costs go up, possibly because of gasoline prices or for other reasons over the course of the year,” Mr. Krueger said.
Focus on fuel efficiency
In speeches this spring, aides said, the president will increasingly focus on his administration’s actions to raise the fuel efficiency of cars and to open new areas to oil and natural gas development. They said they hoped the moves would counter the accusation that he has stifled oil production. On Friday, the Interior Department announced an expansion of oil exploration in Arctic waters.
Mr. Obama has also begun once again to express his personal concern for the impact of gas prices on pocketbooks, as he did last week while pressing Congress to extend the tax cut, which is about $40 per paycheck for a family making $50,000 a year.
“If we start seeing significant increases in gas prices, losing that $40 could not come at a worse time,” the president said Tuesday.
A counterattack being planned by the Obama re-election team in Chicago is expected to point out, among other things, Mitt Romney’s actions to raise gas taxes when he was governor of Massachusetts. And Mr. Obama’s Democratic allies on Capitol Hill are eager to renew a nationwide discussion about tax subsidies to oil companies.
“House Republicans are very good at using every argument they can to shield oil companies from paying their fair share,” said Representative Steve Israel of New York, the chairman of the Democratic Congressional Campaign Committee. “They have been relentless and fearless protectors of oil company profits.”
Republicans on Capitol Hill say they are eager to criticize the president as gas prices rise, in part with a flurry of legislation aimed at increasing domestic production.
They also plan to use Mr. Obama’s decision to block the immediate construction of Keystone XL, a 1,700-mile pipeline that would stretch from Canada to the Gulf Coast. A Republican bill was passed by the House on Thursday to expand offshore drilling and force a permit to be approved for the pipeline.
In an interview, Representative Kevin McCarthy of California, the House whip, mocked Mr. Obama’s claim to want an “all of the above” energy policy.
“He says it in his State of the Union, and then a week later he kills Keystone,” Mr. McCarthy said. “I think energy is going to be one of the major issues in this election, and it’s going to peak in two months.”
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