Bush Touts Solutions to Rising Gas Prices

In a speech Tuesday morning, President Bush forwards a plan to control the rising price of gasoline. Alex Chadwick talks with White House correspondent Don Gonyea about how his administration plans to address the soaring cost of filling the tank.

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MADELEINE BRAND, host:

From the studios of NPR West, this is DAY TO DAY. I'm Madeleine Brand.

ALEX CHADWICK, host:

And I'm Alex Chadwick. Coming up, a CIA officer fired for leaking classified information to reporters says she didn't do it.

BRAND: But first, the high cost of filling up is getting the attention from President Bush. In a speech this morning, the president outlined a plan to combat high prices. He says both the Federal Trade Commission and the Justice Department are investigating whether energy companies are illegally driving up gas prices.

President GEORGE W. BUSH: In other words, this administration is not going to tolerate, uh, manipulation. We expect our consumers to be treated fairly.

CHADWICK: Joining us is NPR White House Correspondent Don Gonyea. Don, welcome back to the show. And the president, of course, is a former oilman. He also said he wants Congress to cut many of the special tax breaks that energy companies currently enjoy. Didn't this administration want those cuts?

DON GONYEA reporting:

It's interesting, because this is a president who has so strongly since taking office, championed tax cuts. And he always talks about if you take a tax cut away, that is, in effect, a tax hike. So it's surprising and you could say that here he is advocating a tax hike by proposing taking away $2 billion in tax breaks for oil companies. He's calling on Congress to do that. It's also important, though, Alex, to note that he did not say something. He did not call for a tax on excess profits or windfall profits for oil companies. He did say, though, that there are things that they get tax breaks for: exploration, investment, that he says they should not get given their current really strong cash flow position. So he's calling on Congress to reduce those tax breaks. We have to wait to see what the fine print is ultimately, I think.

CHADWICK: All right, well, Mr. Bush is also proposing tax credits. These to encourage people to buy more fuel-efficient cars. What about the details there?

GONYEA: He wants to expand tax breaks that are already there. You can get up to $3,400 a vehicle for the purchase of a hybrid car, one of those gasoline-electric cars, or a car that burns, runs on clean-burning diesel fuel. But the catch has been that there are limits on how many vehicles produced by any given manufacturer are eligible. There's a cap. So the president wants Congress to approve a tax cut for every hybrid or clean diesel fuel vehicle that's being sold.

CHADWICK: So the cap would go away. You can buy as many of these as you want from a manufacturer and still get the tax credit?

GONYEA: Exactly. Exactly.

CHADWICK: All right. The other news out of the president's speech this morning: he's ordering a halt to the program that, where the government buys crude oil and puts it in the strategic oil reserve to be used for an emergency. And he's saying I'm going to take away some of the environmental kind of requirements for refining and producing gasoline, at least suspend those for a while to make gas cheaper and easier to get.

GONYEA: Right let's start with the strategic oil reserve. It's mostly symbolic. There's not a real sense that it will do a lot to keep prices down this summer. But as the president put it, every little bit helps. What they're doing is a little bit different from what's been done in the past. You may recall after Hurricane Katrina, they took oil out of the reserve. This time they're just going to stop for a few months putting oil into it. As for the rolling back of the environmental regulations, he says there are too many little different local rules, creating these boutique fuels from place to place. It's inefficient, it's not coordinated. So he's called on a task force to look into it, and he'd like to see some of them rolled back in more uniformity.

CHADWICK: NPR Correspondent Don Gonyea, speaking to us from his post at the White House. Don, thank you again.

GONYEA: Always a pleasure. Thanks.

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