With analysts forecasting that gas prices will reach above $4.50 a gallon by May, Obama will counter criticism for his policies with a major speech on energy strategy today in Florida. The President will reiterate his “all of the above” energy policy. This policy will include more domestic drilling, better fuel standards, lower consumption and a move to green energy projects. There is nothing new in this policy, which just repeats Obama’s rhetoric of the past.
Yesterday the President released a corporate tax cut proposal, which would reduce corporate tax from 35 to 28%, which will however end up costing corporations more because of his proposed tax reform, which will also take away subsidies for the oil industry. While taking subsidies from the oil industry may be a good policy overall, to do it at a time of high pump prices needs to be questioned. Corporations will just pass on the cost to the consumers in the end.
Obama has a few other options to lower prices at the pumps, which includes releasing fuel from the national strategic reserve, however this would only slow the rice of prices temporarily and has been seldom done by any President.
With the heavy dependence on Middle East oil, pump prices are volatile. Issuing permits for some of the public land reserves and offshore drilling could alleviate the situation somewhat. Obama rejected the Keystone XL pipeline, which would have created 20,000 new jobs immediately. The infusion of Alberta oil sands oil would also have provided a buffer to the trouble in the Middle East.
The higher prices will have a negative effect on the economy. While Air Line companies have already raised their prices four times this year, it will eventually affect transportation of goods, consumer spending, etc. Analyst estimate that higher gas prices will take some $35 Billion out of the economy.
Instead of continuing with his “all of the above” rhetoric the President must demonstrate that he is taking some real steps to improve the economy, including the price of oil. He continues to rely on failed polices with green energy by putting good money after bad.
Solyndra is a prime example of these failed policies.
In Florida today, a battleground state, voters should demand that Obama “Show them the Beef.” Enough already of rhetoric. His policies are hitting the pocketbook of voters. So much for the payroll tax cut extension. $40 dollars don’t even buy a tank a gas. Go figure.