President Obama is asking Congress for $52 million in new federal funding to boost oversight of oil markets, increase penalties for price manipulators, and raise margin requirements to reduce market volatility.
The money would fund “more cops on the beat” at the Commodity Futures Trading Commission (CFTC), the agency tasked with regulating oil futures markets. It would also provide “critical IT upgrades” to bring the agency up to speed with the latest technology traders use, officials say.
Obama also proposes a ten-fold increase in civil and criminal penalties for energy market manipulators, from $1 million to $10 million. And he wants to give the CFTC power to raise margin requirements in markets, and to share data more widely within government to look for patterns of misbehavior.
“We’re tackling issues of supply and demand, even as we’re looking at the long term, in terms of how we can structurally make ourselves less reliant on foreign oil,” Obama said in a statement from the Rose Garden. “We still need to work extra hard to protect consumers from factors that should not affect the price of a barrel of oil.”
“That includes doing everything we can to ensure that an irresponsible few aren’t able to hurt consumers by illegally rigging the energy markets for their own gain,” he said.
The White House wants to portray Obama as actively responding to high prices at the pump while shifting some of the blame to Wall Street traders. The announcement was also aimed at drawing a contrast with the House Republican budget, which would slash funding for the CFTC and roll back regulations.
“We should strengthen protections for American consumers, not gut them,” Obama said.
Republicans called the president’s remarks nothing more than “gas price theater.”
“Today’s Rose Garden event is just another gimmick – a shiny object to distract from the fact that Obama doesn’t have a solution for gas prices,” said RNC spokeswoman Kirsten Kukowski.
Senate Minority Leader Mitch McConnell assailed Obama’s spending request on the chamber floor. “I guarantee you it won’t do a thing to lower the price of gas at the pump. It never has in the past. White House officials admit as much,” he said. “Why it would it now?”
On a conference call with reporters ahead of Obama’s remarks, White House officials would not say definitively that alleged market manipulation was in fact contributing to higher prices.
Obama himself conceded that his proposals would not, by themselves, “bring gas prices down overnight.”
Republicans also point out Obama has touted similar initiatives several times before in what they say are attempts to grab headlines. The RNC circulated news wire reports from each of the past four years highlighting Obama pledges to “crack down on oil speculation” while voicing his concerns about the impact on prices.