Key Vote letter Opposing H.R. 6346, the "Federal Price Gouging Prevention Act"
The Chamber sent this letter to all members of the House of Representatives today (PDF here):
June 24, 2008
TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:
The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, opposes H.R. 6346, the "Federal Price Gouging Prevention Act." This legislation purportedly addresses the concerns over the rising cost of gasoline and other fuels, but would more likely exacerbate market conditions and reduce energy supplies.
H.R. 6346 would levy excessive civil and criminal fines, and even imprisonment, for sales that are deemed "price gouging," basing a finding of liability on the determination that fuels have been sold at "unconscionably excessive" prices and that a seller is taking "unfair advantage of the circumstances related to an energy emergency to increase prices unreasonably." However, the Chamber believes that the imposition of such extreme penalties based on such arbitrary, capricious, subjective, and ill-defined standards would itself be unconscionably unjust.
Furthermore, history has shown that such legislation would produce unintended, harmful effects on the economy and on the consumers the bill purports to protect. Because of the subjective definition of price gouging, H.R. 6346 is more likely to exacerbate supply shortages as firms take a wait-and-see approach during energy emergencies rather than risk legal action or enforcement. In the past, when the government has imposed market limitations, ceilings, caps, or other restrictions, this interference with market mechanisms has not resulted in cheaper fuel, but in shortages of the very commodities that this legislation seeks to make more available.
There is no "silver bullet" to address soaring energy prices in the short term. However, there is much that Congress can do to overcome failed polices of the past. The Chamber urges the House and Senate to approve legislation that would expand domestic production in areas that congressional action has placed off limits to production, including the Arctic National Wildlife Refuge and the Outer Continental Shelf (OCS.) In particular, the OCS is estimated to contain 420 trillion cubic feet of natural gas and more than 85 billion barrels of oil. If all U.S. imports of oil and natural gas were to cease, the natural gas located on the OCS off the lower 48 states alone would satisfy all domestic industrial and commercial needs for almost 30 years. This amount of oil would provide a 35-year supply of gasoline for 81 million cars and heating oil for millions of homes in the U.S. for more than 100 years.
The Chamber urges the House to reject H.R. 6346 and, instead, strive to craft an intelligent, comprehensive energy policy that would truly benefit the nation and ease consumers' pain at the pump. The Chamber may consider votes on, or in relation to, this issue in our annual How They Voted scorecard.
Sincerely,
R. Bruce Josten
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