ABC News' Jennifer Duck reports: As record high gas prices continue to plague Americans and further drive down the slumping economy, Sen. Barack Obama launched new proposals to control the high cost of energy while also attacking his Republican presidential rival Sen. John McCain.
“For the past years, our energy policy in this country has been simply to let the special interests have their way -- opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon,” Obama, D-Ill., said in a statement.
The new plan cracks down on energy speculation by fully closing the “Enron loophole.” The loophole was enacted in 2000 and exempts from U.S. regulation energy speculators who make trades electronically.
“I think everyone believes there is too much speculation in the oil market and a lot of it flows directly from that particular loophole,” former Wall Street executive and Obama ally Gov. Jon Corzine told reporters on a conference call.
“It might as well have been called the Phil Gramm loophole, because it was snuck in at the 11th hour and 59th minute in the 2000 energy policy bill, and it really needs to be addressed,” Corzine added, attacking McCain’s economic advisor Phil Gramm. “And it would have a lot of impact, certainly, in the intermediate term, if not in the short term, with greater oversight here.”
Obama’s economic advisor Jason Furman argued McCain is unlikely to support the Democratic presidential candidate's overall plan.
"What we’re talking about today is one very important part of Barack Obama’s overall plan," Furman said, "and it’s an overall plan that John McCain disagrees with. In almost every instance, he sides with oil companies and Barack Obama sides with consumers.”
The McCain campaign responded with a statement explaining how the Republican senator has supported closing the loophole in the past.
“The truth is Barack Obama is following John McCain’s lead to close a Wall Street loophole that was signed into law by President Bill Clinton,” McCain spokesman Tucker Bounds said. “John McCain has supported bipartisan efforts to close this loophole and will work to address abuses in oil speculation. Barack Obama has voted the party line for Democrats who claim the loophole is fixed.”
Although the recently passed farm bill includes a measure to close the "Enron loophole," Obama said he wants to “fully close” the loophole by requiring that U.S. energy futures trade on regulated exchanges.
Obama also is calling for the Federal Trade Commission and Justice Department to start investigating price manipulation in oil markets.
Corzine wouldn’t make his own prediction of future oil prices if regulatory changes go into effect -- but he emphasized some economists’ predictions.
“Chief economists talk about maybe as much as $50 in there," Corzine said. "I’m not proposing that’s what you’d see in reduction in prices, but it’s pretty clear that we’ve got some of the signals that look like you have a frothy bubble, given the high volatility that is occurring in the market place and obviously the dramatic run up that has occurred in a year.”