Ftc Investigation
Mr. President, I rise today to talk about gas prices and the energy situation in our country. First, to agree with my distinguished colleague from Utah, in fact there are long-term issues we have to address. There is no question about…
Mr. President, I rise today to talk about gas prices and the energy situation in our country. First, to agree with my distinguished colleague from Utah, in fact there are long-term issues we have to address. There is no question about that. Alternative fuels, the efforts to put forward very aggressive alternatives such as ethanol, soy-based biodiesel, and other alternatives that create real competition, are critical, but there are short-term actions we can take right now that will help the families who are being squeezed on all sides by outrageous prices, along with outrageously high profits of the oil companies.
Today our leader on the floor, our Republican leader, said there ought to be an investigation going on, and the President said today we ought to have an investigation going on as to possible price gouging. I come to the floor today, as the author of the amendment that successfully passed in the Energy bill last August, to say that we have an investigation going on. The Federal Trade Commission was authorized and charged with doing an investigation, which they are doing as a criminal investigation, into possible price gouging. I was pleased to be joined by Senator Dorgan and Senator Boxer and others in that effort.
Since that time, because they began to move extremely slowly last year, I was pleased to coauthor an increase of $1 million in the budget in order to fund that investigation. We passed that last fall. There have been bipartisan letters that have gone to the Chairman of the FTC saying let's get going. That occurred last fall, last September. Now we are seeing from the Federal Trade Commission that they intend to have this report done, this investigation done by May 21.
It is about time. First I would say: Mr. President, it is your FTC. You appoint the majority of the members on the Federal Trade Commission. You should know that this is going on.
I encourage the President to be engaged with what his Federal Trade Commission is doing at this very moment. Hopefully, we are going to get the right kind of investigation with tough recommendations that will tell it like it is. This is already occurring. Right now the investigation, as I said, is structured as a law enforcement case. They are working with the CFTC, with the States Attorneys General right now. I encourage everyone interested in this issue to give their input to the Federal Trade Commission that is already doing an investigation.
In fact, one of the things they found doing this investigation, as they sent out 200 investigation demands which are roughly the same as subpoenas, ExxonMobil, back in January-February, filed a petition to quash the FTC subpoena for tax information. Fortunately, the Commission denied the appeal and ExxonMobil had to subsequently comply. But now they are looking at manipulation and gouging, whether or not that is happening. They are confident, they say, that they found enough information for a solid determination in their final report, which is expected on May 21.
I say, first to my Republican colleagues, to the leadership, to the President, this investigation is already going on. I am glad you now think there ought to be an investigation. But we would appreciate it if you would be involved in making sure what the FTC does is tough and smart and tells it like it is in terms of what is really going on.
Gasoline is not a luxury for the families of Michigan or the families anywhere across the country. It is a necessity. Families are caught in a bind because, on the one hand, this is not a regulated utility like electricity, and there is not enough competition with basically five different companies. We all know there is not enough competition because of the consolidations that have gone on. So what happens? American consumers are stuck in the middle, squeezed on all sides.
Now in Michigan it costs about $42 to fill up a tank. That is $4 more than last month; $150 more than last year. We are told by the Energy Information Administration there is going to be an average 25-cent increase this summer. We already know that numbers are topping $3, in some cases around the country $4 a gallon.
What this means on average to Michigan families is about $500 more in the cost of gas for this year--about $500. For the average family that is a mortgage payment. That is the rent. That is a car payment. It is paying for food. It is the difference between helping your kids buy books when they need to go to college. This is a big deal. Yet we see comments coming from the head of ExxonMobil, Mr. Raymond, who dismissed the concerns between Exxon's record profits and out-of-control gas prices when he said on CNN that a single quarter or single year's profits is not all that significant.
Mr. Raymond, it may not be significant to you. It is significant to the people in Michigan. Five hundred dollars more is significant. It is a big deal.
We also know that according to our businesses--for instance, General Motors executives say that every time there is a $1 increase in the price of a barrel of oil it adds $4 million to GM's logistical costs. So this is an issue of jobs. Petroleum costs equate with what is happening on jobs. So this is a big deal.
It is also a big deal for the oil companies. As we all know, we have all been seeing the numbers, the total combined profit for the big five oil companies last year was $111 billion. For 2005, ExxonMobil reported the highest profits ever recorded in U.S. corporate history.
What adds insult to injury is when we look at the things like the CEO compensation. He is being paid a total compensation package of $69.7 million. That is about $110,000 a day, by the way. Most people in Michigan don't make $110,000 a year, and we have the head of the largest oil company making $110,000 a day, with a $400 million retirement package. Then we are to expect that this is just the global marketplace happening, that there is nothing we can do? I don't accept that.
In the short run we can do one thing and that is go back to the drawing board on a bill that is in conference committee right now on tax cuts. That has over $5 billion in new tax cuts, tax breaks for oil companies, some of it based on their businesses overseas. We can say no. This industry does not need taxpayers to subsidize $5 billion-plus, plus another $2 billion in the Energy bill that passed last year. We are looking at $7 billion in increased tax breaks that American taxpayers are subsidizing while we are paying the higher prices? No.
I have introduced a bill called the Oil Company Accountability Act that says no to more tax breaks for oil companies and puts that money back into a $500 rebate per taxpayer in this country to pay the cost of higher gas prices for the coming year. The average taxpayer is going to pay $500 more. I think that is a better use of those dollars than putting it into more tax breaks for an industry that is already the most profitable, with the most outrageous salaries, and that continues to price gasoline at a level that is out of control.
I am hopeful my colleagues will be offering this in various capacities. It would be terrific to get this passed right away because families could have their checks in the mailbox before Labor Day to help them pay the outrageously high gas increases that we are seeing: $500 tax rebate checks for families, no to the oil companies on more tax breaks, and that at least gets us on the right track while other long-term efforts needed take place.
Mr. President, I yield.