Senate Energy (D): Senate Dems on Price Gouging

April 25, 2006
05:52 PM

During the past few days (and as recently as this morning), President Bush has repeatedly declared that his Administration is closely watching gasoline markets and will investigate any price gouging, illegal manipulation or other possible cheating in these markets.

This afternoon, in a short, to-the-point letter, 36 Senate Democrats reminded the President that the tough talk of the past few days does not square with public statements of other Administration officials.  The letter seeks clarification of this inconsistency, and asks President Bush if he will support swift enactment of a Federal anti-price gouging statute and enforce it if enacted?

As background for those writing about price gouging, Senate Democrats have a strong record of consumer advocacy on the topic:


·    Democrats Strongly Supported an Investigation of Gasoline Prices, as put in the Energy Policy Act of 2005.  Section 1809 of the EPACT05 directed the Federal Trade Commission “to conduct an investigation to determine if the price of gasoline is being artificially manipulated by reducing refinery capacity or by any other form of market manipulation or price gouging practices.” The provision in the law asked the FTC to submit to Congress, not later than 90 days after enactment, the results of its investigation and any recommendations the FTC might have.  That was last August; so far, the FTC has not delivered.  [PL 109-58, Sec. 1809, 08/08/05]


·    Democrats Fought to Toughen Federal Anti-Price Gouging Powers.  Senate Democrats, along with moderate Republicans, stood with Sen. Maria Cantwell (D-WA) in supporting new legislation to give the Federal Trade Commission new powers to protect consumers from price gouging during energy emergencies.  Her amendment was opposed and rejected on a largely party-line vote.  [ RC 334, S. Amdt. 2612 to S. 2020, 57-42, 11/17/05]


·    Democrats Forced the Federal Trade Commission to Complete a Price Gouging Investigation.   Led by Sen. Mark Pryor, Senate Democrats successfully proposed a provision to force the Federal Trade Commission to complete a new investigation into whether oil and gas companies had gouged consumers by inflating their prices after Hurricane Katrina.   Pryor's amendment, approved by voice vote, required that the FTC use no less than $1 million to conduct an immediate investigation to determine if and where gas price gouging is occurring throughout the supply chain and distribution markets.   The amendment was included in the Commerce, State and Justice FY05 Appropriations bill.  [ PL109-108, Sec. 632, 11/22/05]


Sens. Bingaman (NM), Cantwell (WA), Nelson (FL), and Pryor (AR) took the lead in writing this letter:


April 25, 2006

 The President
The White House

Washington, D.C. 20500

Dear Mr. President:

 Last week, you said that “the government has the responsibility to make sure that we watch very carefully and investigate possible price gouging” in the sale of gasoline, and that your Administration “will do just that.”

 Last November, however, in a joint hearing before the Senate Committee on Energy and Natural Resources and the Senate Committee on Commerce, Science, and Transportation, the Chair of the Federal Trade Commission, Deborah Platt Majoras, testified that no “Federal statute makes it illegal to charge prices that are considered to be too high, as long as companies set those prices independently.”  She went on to say that “[t]he omission of a Federal price-gouging law is not ... inadvertent,” but “reflects a sound policy choice....”

 Moreover, in her prepared statement, Chair Majoras suggested that enactment of a federal price-gouging law would not be “appropriate,” and “likely will do consumers more harm than good.”  She said that an oil company’s  “independent decision to increase price is—and should be—outside the purview of the law.” 

 It is unclear how your statement that your Administration will take action against price gouging squares with Chair Majoras’s statements that price gouging is not illegal, that it should not be made illegal because it is both “difficult to define” and “difficult to enforce,” and that making it illegal “would unnecessarily hurt consumers.” 

 Do you, in fact, support enactment of a federal price gouging statute, and will your Administration fairly and vigorously enforce such a law if enacted?



Akaka        Baucus        Bayh        Biden        Bingaman        Boxer        Cantwell        Carper        Clinton        Conrad        Dayton        Dorgan        Durbin        Feingold         Feinstein        Johnson        Kennedy        Kohl       Landrieu        Lautenberg        Leahy        Levin       Lieberman       Lincoln       Menendez     Murray       Mikulski       Murray        Nelson       Obama       Pryor       Reed       Reid       Rockefeller      Salazar       Stabenow     Wyden