NEW YORK (CNN/Money) -
President Bush Thursday reiterated his belief that the nation's strategic petroleum reserves should be left alone, despite record gasoline prices, in order to make sure the United States can respond to possible oil-supply shocks in the future.
| 
| |
|
|
|
|
|
 CNNfn's Kathleen Hays met with President Bush and chatted about the economy. Find out what his thoughts are on tapping the oil reserves, inflation and taxes.
|
Play video
(Real or Windows Media)
|
|
|
|
|
|
Bush, in a brief White House interview with reporters from CNNfn and other news organizations, said he would only considering tapping the nation's strategic petroleum reserve (SPR) in case of a terror attack on U.S. soil or a major disruption of the world's oil supply.
But the president also said he would consider buying oil in the futures market rather than at spot prices, if futures prices were lower. Buying oil futures would delay the actual delivery of the oil to the government, depending on the length of the contract.
With the average national price for a gallon of regular gasoline climbing above $2 in recent weeks to record highs, Democrats, the airline industry and other groups have pressed Bush to either stop filling up the SPR or to release oil from it, to ease some of the pressure.
Bush and officials in his administration have repeatedly rejected those requests, saying it would make the nation vulnerable and would send a signal to terrorists that the U.S. is only half-prepared to defend itself.
"It is essential that we not send a signal to the enemy that we are now more vulnerable" because the U.S. has used the SPR "for other than its stated purpose."
Some energy experts doubt releasing oil from the SPR -- which currently holds about 660 million barrels of oil in caverns in Texas and Louisiana, with a capacity to hold 700 million -- would have much of an impact on oil and gasoline prices.
The United States uses about 15 million barrels of oil a day, so the SPR's full capacity would only provide about 47 days' worth of oil. A full SPR would replace U.S. imports of oil for about 70 days.
Higher gasoline prices act as a tax on consumers, whose spending fuels more than two-thirds of the total economy. Gas prices may be contributing to sluggish consumer confidence, despite recent signs of improvement in the nation's job market.
Asked Thursday if he isn't concerned that rising gas prices are crippling the economy he said he is "absolutely concerned" about American consumers paying higher gas prices at the pump, and about the higher costs it imposes on businesses.
In other remarks, Bush said tax cuts he proposed and pushed through Congress in 2001, 2002 and 2003 have helped the economy recover from the 2001 recession, terror attacks and other woes, and he said he wanted them made permanent.
Critics from both parties have expressed some concern about ballooning budget deficits, and Democrats want some of the tax cuts to expire, as planned, in coming years. Though Republicans control both houses of Congress, they've disagreed this week about tax and spending plans for the 2005 budget.
Far from giving ground on calls by Democrats and even some Republicans to relent on his push to make his administration's tax cuts permanent, the president said it would be a mistake not to make them permanent because that would be like a tax increase on consumers. And a tax increase could hurt the economy, he said. Moreover, he repeated the White House's pledge to halve the deficit over the next five years.
Bush's interview came at a time when troubling developments in Iraq have hurt his public approval ratings, despite signs of improvement in the economy and the labor market. Bush is running for re-election in November and wants to avoid the fate of his father, whose own re-election bid was undermined by economic issues in 1992.
-- CNNfn's Kathleen Hays contributed to this report
|
