Under the guise of addressing high gas prices, President Barack Obama unveiled a $52 million plan to give oil market regulators more authority to "deter price manipulation by speculators," the AP reports.
The president urged Congress Tuesday to strengthen federal supervision of oil markets, increase penalties for market manipulation, and empower regulators to increase the amount of money energy traders are required to put behind their transactions.
"We can't afford a situation where some speculators can reap millions while millions of American families get the short end of the stick," President Obama said at the White House.
However, and even the AP admits this, the president's plan is more likely meant to draw sharp election-year distinctions between himself and Republicans than have an immediate effect on prices at the pump -- which is what we call a "gimmick."
House Speaker John Boehner called it a political ploy and criticized the president for not using authority he already has to deal with such problems.
"The president has all the tools available to him if he believes that the oil market is being manipulated," Boehner told reporters Tuesday.
"Where's his Federal Trade Commission? Where is the SEC [Securities and Exchange Commission]? He's got agencies there. So instead of just another political gimmick, why doesn't he put his administration to work to get to the bottom of it?" the Speaker asked.
The measures seek to increase spending for Wall Street enforcement at a time when congressional Republicans are trying to reign in federal financial regulations.
President Obama was joined during his Rose Garden remarks by Attorney General Eric Holder, Treasury Secretary Timothy Geithner, Commodity Futures Trading Commission Chairman Gary Gensler, and Federal Trade Commission Chairman Jon Leibowitz.
The president made no effort to disguise his partisan objectives, drawing attention to Republican opposition to a plan to end tax breaks for oil and gas companies.
"So here's a chance to make amends," he said.
Senior administration officials who put together the proposal would not go as far as to say that market manipulation is responsible for rising gas prices, but the officials said they wanted to curtail the ability of speculators to take unlawful advantage of oil price volatility. The officials spoke on the condition of anonymity to discuss details of the plan.
Watch Eric Bolling and Fox Business analyst Phil Flynn "discuss" rising gas prices, oil speculation, and the president’s proposal (via Mediaite):
"None of these steps by themselves will bring gas prices down overnight," the president said. "But it will prevent market manipulation and make sure we're looking out for American consumers."
The president's plan calls on Congress to:
- Increase six-fold the surveillance and enforcement staff of the Commodity Futures Trading Commission to better deter oil market manipulation.
- Increase spending on technology to provide better oversight and surveillance of energy markets.
- Increase civil and criminal penalties against firms that engage in market manipulation from $1 million to $10 million.
- Give the Commodity Futures Trading Commission authority to increase the amount of money that a trader must put up to back a trading position. The administration officials said such authority could help limit disruptions in energy markets.
The White House effort comes as Republicans have talked of limiting the reach of a financial regulation overhaul that Congress passed in 2010 over their objections.
Though the House Republican budget, which calls for sharp reductions in government programs, does not specify reduction in spending by the trading commission, the administration officials said that if the cuts were applied the commission would lose more than five times what it spends on regulating energy markets.
The debate will pit Republicans who blame the president for high gasoline prices against a White House that blames Republicans for coddling Wall Street.
The Associated Press contributed to this report.
The article has been updated.