As midterms approaches, the White House is in turmoil over OPEC’s decision to cut oil production by 2 million barrels a day. The decision, if it leads to spikes in oil prices, will further enrich the Saudis and further strengthen Putin’s evil regime. It will also add upward pressure on inflation here in the United States at a time when the administration and its allies in Congress urgently need to convince voters that they have a firm grip on the country’s economic reins.
To have any hope of retaining a majority in the House of Representatives, Democrats will need to thread a series of needles in the coming weeks. They need to focus heavily on abortion and on Donald Trump’s escalating assault on the country’s democratic system of government, as independents are more likely to break the Democrat path on both issues. They must show that inflation, which polls say is the top concern of voters this election season, is being brought back under control – through a so-called “soft landing” despite the Federal Reserve’s increasingly aggressive rate hikes targeting both housing and and could also affect the labor market. They also need to show that Democrats really stand behind their constituents in key swing neighborhoods.
That brings me to California and the few Democrat-controlled swing districts the party needs to hold, along with the other handful of Republicans the Democrats desperately need to turn around to offset expected losses elsewhere in the country.
Most of these counties are located either in the Central Valley or in the suburbs of Los Angeles/Orange County, both of which are high-vehicle areas. In my opinion, the biggest single risk the Democrats face in their bid to retain control of Congress is rising gas prices in California.
In the past two weeks, a combination of local refinery outages, California’s unique fuel refining requirements, a regime of high gas taxes, and according to Gov. Gavin Newsom, energy industry profits have caused gas pump prices in the Golden State to skyrocket in some regions the 7- exceeded the dollar mark.
As of Wednesday of this week, the average price for a gallon of regular gasoline nationwide was $3.83. In California, on the other hand, it was $6.42. For a low-income worker, say a farm hand, driving a pickup truck long distances in a remote rural area, that could easily add up to $100 a week to what they would pay if they lived elsewhere .
Gov. Newsom has launched investigations into price gouging in the oil industry and has promised to introduce windfall taxes against profit-hungry energy companies. In late September, his office released a statement that said: “At the end of August, crude oil prices were about $100 a barrel and the average gas price in California was $5.06; Now, even though oil prices have fallen to $85 a barrel, the average price of gas at the pump has risen to $6.29.” The California Energy Commission has also joined the fray, demanding answers from oil executives as to why prices in California are so high increased more than in other parts of the country. But Newsom’s threats against the oil industry and the CEC’s anger seem to have fallen on deaf ears. Since late September, prices in the Golden State have continued their relentless march north.
Newsom has ordered the state’s Air Resources Agency to allow refiners to produce their cheaper (but marginally more polluting) winter blends a month earlier in hopes it will ease pricing pressures at the pump. After months of delays, the state is finally about to issue hundreds of dollars in loans to taxpayers — some lower-income households could get as much as $1,050 — either deposited directly into their bank accounts or mailed to them on EBT cards to offset at least some the burden of higher gas prices. It’s a $9 billion+ program that will help alleviate the worst hardships caused by the gas price spikes.
These are all necessary interventions, but even taken as a whole, they won’t come close to eliminating the pain being inflicted on low-income drivers by California’s absurdly high gasoline prices, particularly those who haven’t been able to upgrade to more fuel-efficient vehicles in recent years years. Yes, California has a higher-than-average median income, and yes, it has a minimum wage of $15 an hour, which is more than double the state minimum wage, but it also has extremely high real estate prices and other utilities. Living expenses offset much of that extra income. Add high gas prices to the mix, and many at the bottom of California’s economy just can’t balance their family finances.
Wriding in The nation In 2005, during an earlier round of gas hikes, I proposed that the federal government create a food stamp-style gas stamp program that would largely subsidize gas purchases for low-income residents during market turmoil. Back then, rural California towns were being stalked by gasoline prices that had reached nearly $3.50 a gallon. Gasoline prices are more than double today, but the average family income in the state has increased far less in those 17 years — from about $51,000 to $81,000. As a result, Californians who are not wealthy enough to switch to more fuel-efficient cars will spend a higher proportion of their income on gasoline in 2022 than during previous gas price spikes and a far higher proportion than at more “normal” gas price levels. And yet there are still no government subsidies — and insufficient government subsidies — to help low-income Americans make ends meet.
If Democrats don’t want to be blamed for this, they urgently need to legislate gas-buying subsidies for low-income residents during periods of extreme price volatility, as well as other tools to curb profits in the energy industry. Otherwise, in California’s swing districts and elsewhere, they run the risk of ending up on the wrong end of voter frenzy with gas prices becoming more prohibitive by the day.
Recent polls suggest that 29 percent of California voters see inflation and overall economic malaise as their top concerns. It has pushed housing and homelessness to the top of voters’ list of concerns. Similar polls are taking place across the country, including in critical swing state Arizona, where Phoenix-based pollster Mike Noble of OH Predictive Insights recently told me his findings suggest “inflation is trumping abortion,” and where the Gas prices have risen in recent weeks.
For more than a year, poll after poll has shown voters by a wide margin to blame Biden and Congressional Democrats for policies that have exacerbated inflationary spirals. There are vulnerable Democrats in California’s 9th, 13th and 49th congressional districts and vulnerable Republicans in the 22nd and 41st districts. Arizona also has several critical suspension seats at play in convention racing. If gas prices continue to rise in California, Arizona and elsewhere, and as a result those seats don’t become Democratic on election night, Kevin McCarthy will likely be the next House speaker. On many, many levels, that would be a tragedy for American democracy.