President Barack Obama Tuesday called on Congress to expand the administration's authority to target speculators attempting to manipulate oil and gas prices.
Speaking in the White House Rose Garden, flanked by Attorney General Eric Holder and Treasury Secretary Tim Geithner, Obama also called for additional funding to allow for an upgrade of information technology and the hiring of more regulators to police oil market trading.
While Obama acknowledged that the current high price of oil is largely a result of other factors outside his control, such as growing global demand and instability in the Middle East, he said it is still important to do everything possible to protect consumers.
"We can't afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher -- only to flip the oil for a quick profit," Obama said. "We can't afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick. That's not the way the market should work."
He added, "For anyone who thinks this cannot happen, just think back to how Enron traders manipulated the price of electricity to reap huge profits at everybody else's expense."
Obama called on Congress to pass a supplemental budget appropriation of $52 million to allow for the hiring of more regulators - putting "more cops on the beat," as the President put it - and to upgrade information technology systems so regulators can more closely monitor the markets.
"We should strengthen protections for American consumers, not gut them. And these markets have expanded significantly," he said.
Quoting Commodities Futures Trading Commission Chairman Gary Gensler, Obama used a football analogy to illustrate the need for more regulatory personnel.
"Imagine if the NFL quadrupled the number of teams but didn't increase the number of refs," the president said. "You'd end up having havoc on the field, and it would diminish the game. It wouldn't be fair."
He added, "That's part of what's going on in a lot of these markets."
Obama also sought a statutory increase in the civil and criminal penalties the CFTC can levy against those who illegally manipulate energy markets and expand the ability of regulators to require traders to post more funds as security against market moves.
The president conceded that none of these measures would bring down gas prices in the short term but insisted that they were nevertheless important.
"It will prevent market manipulation and make sure we're looking out for American consumers," he said of his proposal. "And in the meantime we're going to keep pursuing an all-of-the-above strategy for American energy to break the cycle of price spikes year after year."
He added, "We are going to keep producing more biofuels; we're going to keep producing more fuel-efficient cars; we are going to keep tapping into every source of American-made energy."
by RTT Staff Writer
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