June 30, 2008
Late yesterday, the House introduced and passed the Energy Markets Emergency Act of 2008. H.R. 6377 directs the CFTC to take emergency action to address excessive speculation, swap transactions, and price distortion in energy markets. The bill’s passage, by an overwhelming majority of 402-19, sends a message to the energy traders that more legislation is to come.
House Democratic leaders hope to bring broader legislation to the floor next month that requires greater transparency and new curbs on speculation by pension funds, big banks and other investors. You will recall that on Tuesday, the House Agriculture Committee announced a markup scheduled for Wednesday that would address speculation in energy commodity markets. However, Chairman Collin Peterson (D-MN) decided to wait until he could hear from members of Congress and energy analysts who have taken a lead on the issue and the markup was cancelled. The bill (H.R. 6334) sponsored by Rep. Bob Etheridge (D-NC) would expand oversight and increase funding and staff levels at the CFTC, but some members of Congress complained that the bill would not go far enough to rein in excessive speculation. The House Agriculture Committee plans on spending more time on the issue once the House returns from July 4 recess. Please review H.R. 6377 here. (pdf file)
Although this is positive news and a strong indication that there could be enough votes on both sides of the aisle to pass a broad bill to fully address excessive speculation in the energy commodity markets, this is the time that we need to go full steam ahead with the PMAA Stop Oil Speculators campaign!
Congress needs to hear from all of us loud and clear that a full and comprehensive solution must be made immediately! Please contact PMAA if you need information about the campaign and how to receive campaign material to distribute at your retail stations.
June 2, 2008
Senators Richard Durbin (D-IL), Olympia Snowe (R-ME), Herb Kohl (D-WI), and Arlen Specter (R-PA) have sent a letter to Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc., and Robert Selander, President and Chief Executive Officer of MasterCard Worldwide, asking them to provide detailed documentation on the methodology and data that Visa and MasterCard use to set interchange fee rates. Interchange fees are supposed to ensure that issuing banks can cover their costs in processing and authorizing transactions. However, the $42 billion that Visa and MasterCard collected last year has raised concerns in Congress that interchange fees are an enormous profit center through which a variety of marketing and rewards programs are funded.
The Senators requested that Visa and MasterCard provide by June 3 an itemized list of the costs that issuing institutions bear in processing transactions made with Visa and MasterCard cards. The letter also asks for data on the amount of costs per transaction and for information on activities paid for by interchange fees.
May 4, 2008
High gasoline and diesel prices have been the main topic of discussion for Congress this week. Presidential candidates have also been partaking in the debate with Senators John McCain (R-AZ) and Hillary Clinton (D-NY) advocating a tax holiday over the summer months. The Congressional Research Service (CRS) also issued an assessment on gas prices which outlines previous attempts by Congress to address the issues. PMAA is reviewing the CRS report in detail.
On the issue of futures market reform, numerous Members of Congress and separately Senate Republicans have discussed the issue this week and some may introduce new legislation. Senate Democrats are working on gas price legislation and Senator Dorgan (D-ND) has been advocating an increase in margin requirements for speculators. Sen. Dorgan is also working to include an amendment to the Federal Aviation Administration Reauthorization bill (H.R. 2881) that would halt all oil deliveries to the Strategic Petroleum Reserve (SPR) until the price of oil falls below $75 a barrel. Senator John Barrasso (R-WY) has also introduced his own bill, S.2927, to halt oil deliveries to the SPR. While Senator Dorgan’s (D-ND) proposal incorporates a price trigger on halting deliveries to the SPR, Republicans are proposing a six month freeze on deliveries to the SPR without a price trigger. It is not yet known if the Democrats will support the Republican proposal.
Senator James Inhofe (R-OK), ranking minority member of the Senate Environment and Public Works Committee, is voicing his concern that the Renewable Fuel Standard (RFS) has driven food prices to unprecedented levels. He has proposed that the Environmental Protection Agency (EPA) should use its authority to waive all or portions of the RFS mandates as part of its rulemaking process. Senator Kay Bailey Hutchison (R-TX) who chairs the Republican Policy Committee, announced plans to introduce legislation to stop national biofuel production at current levels for 2008.
Meanwhile, it looks like the Farm Bill will get another two week extension. Lawmakers are close to an agreement, but need time to make some adjustments to farm subsidy caps. House Agriculture Chairman Collin Peterson (D-MN) said that the House and Senate intend to make substantial cuts to farm subsidy caps and will have the votes necessary to override a veto. House Majority Leader Steny Hoyer (D-MD) said that he expects the House to take up the final version of the bill next week.
January 24, 2008
With the Nation teetering on the verge of a recession, Congress and the President believe they must pass an economic stimulus package. Last night a tentative agreement was reached on a $145 billion economic stimulus package that would quickly send payments to the poor and middle class while offering businesses faster tax write-offs for corporate investment and immediate tax deductions for small-business investments in plants and equipment. Businesses also would be able to take tax deductions this year on operating losses from as long as five years ago.Every Member of Congress via the urging of interest groups will be lining up to add riders to the package. Of note for marketers, it is possible that an extension of the renewable energy tax credits will be in the package.* That would mean an extension of the biodiesel and ethanol tax credits, which are set to expire at the end of this year. The Senate Finance Committee still plans to put together provisions to be attached to the final bill.
Also, Senator Snowe (R-Maine) is fighting for full funding of the Low Income Home Energy Assistance Program (LIHEAP) at $5.1 billion and House Speaker Pelosi (D-Calif.) has set aside proposed funding increases for low-income heating assistance. PMAA has strongly urged Congress to fully fund the critical LIHEAP program.The process for passage of the package is for the House to take up the measure first, and for both chambers to pass the bill before President’s Day (February 18). It is likely that the regular committee process will be bypassed in order to move the package quickly. *Senate Finance Chairman Max Baucus has signaled he does not support renewing the tax credits.
*Senate Finance Chairman Max Baucus has signaled he does not support renewing the tax credits.