US Congress set to battle over gas-price 'gouging'
The Senate and House make a controversial move to control alleged profiteering.
from the June 20, 2007 edition
Page 3 of 3
Critics say language too ambiguous
At a recent congressional hearing, FTC commissioner William Kovacic said the ambiguous definition of harm contained in the House and Senate bills – "unconscionably excessive profits" – would make for difficult enforcement decisions.
In addition, the penalty for those found guilty might be up to 10 years in prison under the new laws, pointed out Commissioner Kovacic. That tough stricture, plus the law's vague language, might result in oil firms shutting down supplies in an emergency – lest they be charged with profiteering if prices spiked for normal economic reasons.
"My intuition is that it would create hesitation in the response to shortages and that that might tend to exacerbate rather than mitigate shortages," Kovacic told Congress.
In the Senate, this week is crucial for the energy bill as a whole. On June 19, the Senate Finance Committee is expected to approve a package of tax incentives for the legislation that would take $15 billion in tax breaks from large oil companies and steer it toward clean, renewable energy sources such as wind and solar power.
Disputes over auto fuel economy, requirements for utilities to use more renewable energy sources, and efforts to develop the use of coal as a motor fuel could still stall the broad legislation. All these issues have been the subject of intense lobbying by automakers, utilities, and other affected industries.
Given the stakes inherent in the legislation, it is too bad that the price-gouging provision has raised the prospect of a White House veto pen, says Pietro Nivola, a governance expert at the Brookings Institution in Washington.
In essence, the other things in the bill may be more important, he says.
"Profiteering does happen," he says. "But it is a footnote to the larger story."
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