Full text of the press conference: here
The President: Thank you. Good morning. This is a tough time for our economy. Across our country many Americans are understandably anxious about issues affecting their pocketbook, from gas and food prices to mortgage and tuition bills. They're looking to their elected leaders in Congress for action. Unfortunately, on many of these issues all they're getting is delay.
Translation: I was wrong about all that I had previously said about the economy being in good shape and my saying that “…we anticipated this and took decisive action to bolster the economy…” (G.W. Bush – March 7, 2008)
Furthermore, it isn’t my fault; it is completely Congress’ fault. Bush previously had used his authority to provide for the $168 billion tax rebate and other actions in the past. So, why is he so impotent all of a sudden?
Analysis: The U.S. Constitution requires that the President “…recommend to their [Congress] consideration such measures as he shall judge necessary and expedient; he may, on extraordinary occasions, convene both Houses, or either of them…take care that the laws be faithfully executed…”
This means that Bush should not be pointing fingers at the Congress for lack of action but rather take action using the powers accorded to the office. Or, as Harry S. Truman had said many times: “The Buck Stops Here.”
The President: I've repeatedly submitted proposals to help address these problems. Yet time after time, Congress chose to block them. One of the main reasons for high gas prices is that global oil production is not keeping up with growing demand. Members of Congress have been vocal about foreign governments increasing their oil production; yet Congress has been just as vocal in opposition to efforts to expand our production here at home.
Translation: I've repeatedly submitted the same proposals with very little details over and over again but Congress is wise to my ways and won’t let me push them around anymore. Also, even though I have a Harvard MBA degree, I do not understand simple economics of what drives the gas prices. I think it is due to global oil production…
Analysis: Mr. Bush, here is a basic primer on gas prices. As for the high gasoline prices, here is something that you can do right now, Mr. Bush, to secure a legacy and drive down high gasoline and diesel prices:
Create strategic jet fuel, gasoline, and diesel reserves and release the reserve fuels into the market whenever the prices get too high. Since gasoline can last only for up to a year (page 82), rotate the supply to ensure freshness of supply. (Diesel and jet fuel can last for a long time in storage with proper care, page 97.) This way the federal government can smooth out the sharp spikes and dips in fuel prices (sell into the market when prices are high and buy into reserves when prices are low). This will also make moot the issue of lack of gas refinery in the U.S.
The President: They repeatedly blocked environmentally safe exploration in ANWR. The Department of Energy estimates that ANWR could allow America to produce about a million additional barrels of oil every day, which translates to about 27 millions of gallons of gasoline and diesel every day. That would be about a 20-percent increase of oil -- crude oil production over U.S. levels, and it would likely mean lower gas prices. And yet such efforts to explore in ANWR have been consistently blocked.
Another reason for high gas prices is the lack of refining capacity. It's been more than 30 years since America built its last new refinery. Yet in this area, too, Congress has repeatedly blocked efforts to expand capacity and build more refineries.
Translation: Again, I have presented no concrete plan for drilling in Alaska; that’s why I can’t do anything more than gripe about the Legislative check of Executive power and blame them for the high gas prices, unjustly. It is unjust since the blame should be given out equally.
Analysis: While 1 million barrels of oil per day is about 20% of total U.S. production, we import about 10 million barrels a day.[i] Bush is correct about the lack of refining capacity. However, it is not Congress’ fault. There are the issues of NIMBY (Not In My Back Yard) environmental protest and the high cost of building a new refinery and infrastructure, as citied by the oil industry.[ii]
Again, by developing a strategic reserve of jet fuel, gasoline, and diesel, the government can smooth out price spikes and dips. This will further provide insurance against natural disasters in the gulf region, which houses all of our strategic oil reserves and refineries.[iii]
The President: As electricity prices rise, Congress continues to block provisions needed to increase domestic electricity production by expanding the use of clean, safe nuclear power. Instead, many of the same people in Congress who complain about high energy costs support legislation that would make energy even more expensive for our consumers and small businesses.
Translation: I don’t know my facts so let me just continue to bash Congress for high electricity prices as well.
Analysis: Nuclear power provides about 19.4% of the current U.S. electricity. In fact, the U.S. has the largest commercial nuclear energy program in the world, with 104 power reactors in 31 states. Moreover, U.S. Nuclear Regulatory Commission (NRC), which regulates the construction and operation of new commercial nuclear power facilities, has received a total of 23 applications covering 34 nuclear units for CY 2007 to 2010. Of this, 15 applications covering 22 units, of which three are new facilities, were received in CY 2008 alone.[iv] Additionally, there are nine combined licenses – an authorization from the NRC to construct and operate a nuclear power plant at a specific site – covering 15 units, all filed between 2007 and 2008.
The President: Congress is considering bills to raise taxes on domestic energy production, impose new and costly mandates on producers, and demand dramatic emissions cuts that would shut down coal plants, and increase reliance on expensive natural gas. That would drive up prices even further. The cost of these actions would be passed on to consumers in the form of even higher prices at the pump and even bigger electric bills.
Instead of increasing costs and increasing new roadblocks to domestic energy production, Congress needs to clear away obstacles to more affordable, more reliable energy here at home.
Translation: I meant to say “tax credit” but I keep on saying “taxes.”
Analysis: The bill that Bush is referring to is the H.R. 5351: Renewable Energy and Energy Conservation Tax Act of 2008 (analysis here and full text here). This bill, passed by the House of Representatives, is before the Senate.
Here is an unbiased analysis of the bill from Congressional Budget Office: “Among the provisions, the legislation would extend and modify existing renewable energy tax credits, create new tax credits for the production of certain renewable energy sources, and reduce a deduction from taxable income allowed for oil and gas producers. It also would shift some corporate income tax receipts from 2014 into 2013. JCT [Joint Committee on Taxation] estimates that the legislation would increase revenues by $1.5 billion over the 2009-2013 period and by $2.4 billion over the 2009-2018 period.”
The President: Americans are concerned about rising food prices. Unfortunately, Congress is considering a massive, bloated farm bill that would do little to solve the problem. The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers. America's farm economy is thriving, the value of farmland is skyrocketing, and this is the right time to reform our nation's farm policies by reducing unnecessary subsidies. It's not the time to ask American families who are already paying more in the check-out line to pay more in subsidies for wealthy farmers. Congress can reform our farm programs, and should, by passing a fiscally responsible bill that treats our farmers fairly, and does not impose new burdens on American taxpayers.
Translation: Hey, anyone who makes $500,000 or more in farming shouldn’t get any subsidy…well except for those farmers who are turning our corn into ethanol. That’s different.
Analysis: Bush is right on the Farm Bill and I agreed with him in my previous article: New York City Is Farmland. Who Knew?
Here is an unbiased analysis of the Farm Bill from Congressional Budget Office: “On balance, those changes to the unified budget would produce net costs (increases in deficits or reductions in surpluses) of $5.1 billion over the 11-year period.”
The President: Americans are concerned about making their mortgage payments and keeping their homes, and I don't blame them. Last year I called on Congress to pass legislation that would help address problems in the housing market. This includes critical legislation that would modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac, and allow state housing agencies to issue tax-free bonds to refinance sub-prime loans. Yet they failed to send a single one of these proposals to my desk. Americans should not have to wait any longer for their elected officials to pass legislation to help more families stay in their homes.
Translation: Whoops. I forgot that the Senate did pass the FHA Modernization Act of 2007 (S. 2338) and the House of Representatives passed the Expanding American Homeownership Act of 2007 (H.R. 1852). Maybe I should address the Congress to hammer out their differences?
Analysis: Congress has been working very diligently on reforming the housing legislations. In addition to the bills passed in the respective parts of the Congress, the Senate is working on “A bill to aid families and neighborhoods facing home foreclosure and address the subprime mortgage crisis” (S. 2734), introduced on March 2008.
What Bush should be doing, instead of just sitting and griping, is to use his executive powers to address the Congress to combine their two bills and provide the needed reforms to the existing housing legislations. Additionally, Bush muddied the process by having Hank Paulson address the public about the White House plan, which was light on detail but heavy on the talking points.
The President: Americans are concerned about the availability of student loans. The recent credit crunch makes it uncertain that some students will be able to get the loans they need. My administration is taking action through the Department of Education's "lender of last resort" program, which works to arrange loans for students who are unable to secure one from a lender on their own. In other words, we're helping. Congress needs to do more by passing a bill that would temporarily give the federal government greater authority to buy federal student loans. This authority would safeguard student loans without permanently expanding the government's role in their financing.
Translation: The Department of Education's "lender of last resort" program already exists and I am just taking advantage of it but spinning it as if I thought of it first.
Analysis: The Clinton Administration (Clinton Plan) had already implemented the lender of last resort for student loans with the Reauthorization of the Higher Education Act of 1998 (Page 109). Moreover, the problem with “students who are unable to secure one from a lender on their own” is a direct result of the problems with Sallie Mae, which was well known in 2002, 2003, 2004, 2005, 2006, 2007, and 1Q 2008 but nothing was done. So, why is it now the Congress’ fault?
The President: In all these issues, the American people are looking to their leaders to come together and act responsibly. I don't think this is too much to ask even in an election year. My administration will reach out to Congress. We will work to find areas of agreement so that we can deal with the economic pressures that our American taxpayers and American families are feeling. I ask Congress to do its part by sending me sensible and effective bills that I can sign, instead of issuing or sending bills that simply look like political statements. We can work together. We can help Americans weather this difficult period. We can keep our country moving forward.
Translation: Send me the bills that I like or I will not sign them.
Analysis: The American people are looking to their leaders to come together and act responsibly. However, you, Mr. Bush have so far demonstrated weak leadership. This is evident by the ratings results (Source: Pollingreport.com):
I don’t know how the Bush administration is going to work together with Congress in the last few months that Bush has left but, based on what he has done so far, it may be too little too late. Mission Accomplished.Regards,
Ed Kim
riskyops.blogspot.com
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[i] http://www.eia.doe.gov/neic/quickfacts/quickoil.html
[ii] http://money.cnn.com/2007/04/17/news/economy/refineries/index.htm
[iii] http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve
[iv] http://www.nrc.gov/reactors/new-licensing/new-licensing-files/expected-new-rx-applications.pdf (Existing nuclear plants are filing for power uprates, a license to increase power production at their existing facilities.) Sphere: Related Content
