Commentary: Where's the Real Solution to Gas Prices?

Here is an issue that average Americans are all concerned about. Beginning in April, the price per gallon of regular gasoline nationwide averages near $4.00. While Austin prices are still climbing to that peak, an article posted on April 11th indicated that economists project that once that threshold has been reached nationwide, public ire and the consequences for citizens' budgets will have consequences on consumer spending on non-gasoline products and could also harm the transportation sector.
     While the economists have already attributed the increased commodity price of foreign crude on the political turmoil broiling in the Middle East, political commentators have shown that national politicians are using the issue to propel their party's interests to the forefront, and will likely not result in a reduction in the cost of gasoline. Democrats, including the President, have begun campaigning to drop tax subsidies that have given major oil corporations extra billions in revenue for almost a century now. This has turned into a political weapon, many agree, that Democrats are using to paint Republicans as siding with corporate interests in the face of growing citizen concern and the not-so-startling fact that oil companies are enjoying record profit. Republicans defend the tax subsidies and say that removing them will only increase the price of oil.
    I agree that these ancient tax deductions are funneling money into foreign markets by allowing corporations to deduct their foreign-based royalties as taxes, and also that removing them may in the short-term cause corporations to collectively decide to raise prices in what they consider "compensation".  What does a company need to compensate when they are receiving over $10 billion in three months in revenue, like Exxon? However, how is this partisan battle going to solve this? John Broder iterates this concern in a recent NYTimes article, arguing that the divided Congress will probably prove the greatest obstacle in creating solutions to gas prices, and mostly likely, other concerning issues being considered in the 2012 budget.
          But some hope, I find, has come from a more progressive argument. Daniel Esty, commissioner for the Connecticut Department of Environmental Protection and Michael Porter, a business professor at Harvard, collaborated in an op-ed contribution to the NY Times describing their solution for sky-rocketing oil prices, which is carbon-emissions taxation. The argument is often feared by many conservatives who see it as an impetus to their beloved and established energy industries, it however tries to tackle the real issue: The fact is, Americans are reliant on an unsustainable, unreliable, and dangerous source of energy, which is foreign oil, controlled largely by oligopolies and other proven corrupt governments. Their proposal calls for an incentive-building policy, with incremental increases in the carbon tax that would spur the national transition first to natural gas and hybrid energy, decreasing the nation's carbon emissions and oil consumption by half. In the long-term, the goal is to innovate the energy industry towards renewable sources spurred by increased competition for efficiency in renewable energy.  The policy is built to rouse increased innovation and give the entrepreneurial spirit our nation was built on a new vigor, for an issue that seems the most pressing for this generation's future.

The Budget Deal: What's to Come

In an article posted by American Government two weeks ago, the budget negotiations between Republicans and Democrats in Congress was described as it looked before the budget cuts were passed.  Since then, the game has changed a bit. Congress passed the resolution a mere hour before missing the deadline, which would have set off the initial stages of a partial federal shutdown. Presumably, the heated, mostly partisan debate would have continued past the deadline were it not for the Obama administration urging Congress to pass the spending cuts through compromise, as a government shut-down could stop the economy's recovery.
           The results? Both sides of the debate have had to compromise significantly to their equal dismay, foreshadowing heated debate to continue in amending the bill. While Republicans, influenced in great part by the interests of tea-party activists' demands, originally fought for budget cuts of up to $61 billion for the 2011 fiscal year ending in September, the cuts only slipped through the divided Congress after Democrats whittled this number down to the final compromise of $38.5 billion. The dizzying array of cuts and amended cuts represent victories and defeat for both side, and notable cuts include federal high-speed rail funding, funding for the removal of Guantanamo prisoners into the U.S. or a foreign country, and emergency first responders
.
        It seems evident through the course of these political battles and the upcoming debates over cuts on the 2012 GOP budget proposal that the interests guiding legislators in these battles are focused on strategies for the dominance of their party, rather than the social welfare, nor the consequences for average citizens.  While republicans are battling for widespread overhaul of federal projects to reign in the staggering debt, the actions of legislators can also be seen as continuing their support from Tea party activists who are pushing the cuts the hardest. Meanwhile, senate Democrats have worked to protect much of the defense budget and federal subsidies for Democratic pet projects, which keeps their constituent interests happy. While I would love to see the staggering $14 trillion of debt we have built dealt with seriously by our legislators, it seems that the upcoming negotiations that will shape the 2012 federal budget may result in some equally unsatisfying compromises.