NYT : Better Mood at the Gas Pump. What About the Voting Booth?

Better Mood at the Gas Pump. What About the Voting Booth?

By JAD MOUAWAD | September 30, 2006

Gasoline prices have plummeted in the last month, dropping by nearly 25 percent since mid-July, and despite a recent uptick in crude oil prices, most energy experts still expect the price of gasoline to fall a bit further by November.

Six weeks from the midterm elections, the falloff is comforting the Republican majority up for re-election in Congress, limiting the impact of a potentially damaging issue. But Democrats hope to gain power on Capitol Hill, in part, by hitting on the toll that high energy costs have taken on American consumers and trying to draw connections to what they see as the Bush administration’s kowtowing to big oil interests.

A gallon of regular gas now averages $2.33, after rising above $3 in August. But given that even the current lower prices are higher than was common just a couple of years ago, the question of who will benefit politically from the drop is still hotly disputed.

“Nobody thinks $2.50 a gallon is cheap; it’s still expensive,” said Representative Rahm Emanuel, Democrat of Illinois, who is leading the effort to win a majority in the House. “Guess what? Republicans may be relieved from a political standpoint but their voters aren’t.”

So, are Republicans worried?

“Absolutely not,” said Carl Forti, the spokesman for the National Republican Congressional Committee. “Right now people are excited they are not paying $3 a gallon anymore, and frankly, so am I. Today, in every place in America, gas is cheaper than a month ago.”

The sudden decline has also ignited suspicions that the Republican administration and giant oil companies conspired to cut gasoline prices for electoral gains.

“I think prices are going down now because it’s election time but I feel they will go back up again right after,” said Roberta Mays, a school bus driver in Knox, Pa.

Her opinion was reflected in a Sept. 15-17 Gallup poll, which found that 42 percent of respondents said that they believed the Bush administration was manipulating the price of gasoline in advance of the fall elections.

And the accusation has provoked a vigorous debate on the Web. On huffingtonpost.com, a left-wing blog, someone commented: “Anybody with any brains KNOWS this government manipulates almost everything here in the States.”

The White House press secretary, Tony Snow, even brought up that conspiracy theory at a recent briefing by joking that some people thought “the President has been rigging gas prices, which would give him the kind of magisterial clout unknown to any other human being.”

Prices are down largely because of a sharp drop in global oil prices, which peaked in July at $77 a barrel, and, while up slightly this week from recent lows around $60, are still under $63 a barrel.

Much of the drop can be attributed to a big sell-off by hedge funds and other speculative traders, who help determine the price of crude oil and other petroleum-based products on international commodity markets — and not to American oil companies, which control only a fraction of global oil supplies.

While the drop this fall is larger than under ordinary circumstances, it also fits a pattern that sometimes occurs at this time of year. Tom Kloza, publisher of the Oil Price Information Service, said a decline in prices after Labor Day was not uncommon because of lower demand in the months following the summer driving season. Demand then picks up in the winter, often leading to a rebound in prices.

“One of the reasons you don’t hear much about gasoline during elections is because gasoline is almost always in retreat at this time of the year,” Mr. Kloza said. “If we really want to see a meaningful energy policy in this country we need to change the elections to May.” In recent weeks, oil traders have also been comforted by the fact that no strong hurricane has slammed into the Gulf of Mexico, home to a quarter of America’s domestic energy supply, and that tensions in the Middle East seem to have eased a little.

Not surprisingly, the sharp decline in gasoline prices has lifted the morale of Americans. Consumer confidence indicators released on Tuesday rebounded from a nine-month low, thanks mainly to the drop in gasoline, which has left many Americans feeling a little wealthier.

The retreat of gasoline prices provides some relief to the Bush administration and Republicans that could help blunt public dissatisfaction with Washington.

“It removes a significant arrow from the quivers of Democrats,” said Frank Luntz, a Republican political consultant and pollster. “When prices crossed $3, voters wanted their elected officials to feel as much pain as they felt. Now, all that anger is gone. I don’t think it’s going to help Republicans but it is no longer going to help Democrats either.”

Still, despite the drop-off, many Americans remain deeply disturbed by the price of gasoline. Indeed, today’s prices have merely erased the most recent highs and have barely returned to last year’s levels.

Ms. Mays, 41, said she recently gave up a job that required a 60-mile commute each day, partly because of the high cost of gasoline. A single mother who is struggling to raise a 10-year-old son, she said the fuel price increase absorbed a large chunk of her $9,000 salary.

“It was almost not worth going to work anymore,” she said. “I keep thinking when is gasoline going back to $1 again? It would be nice but I don’t think so.”

Democrats are hoping that such feelings will translate into a high turnout among discontented voters, enough perhaps for them to win the House and even the Senate.

“Voters see the link” between gasoline prices and chaos in the Middle East and in Iraq, said Paul Begala, a Democrat political strategist. “You don’t have to tell them.”

“If they pull up at the pump and pay $2.50 instead of $3 a gallon, it’s an enormous difference,” he added. “Do they say ‘Thank you George Bush,’ and vote Republican? Perhaps. But I wouldn’t want to be the Republican staking my career on that decision.”

Political analysts said that while the war in Iraq and the handling of relief efforts after Hurricane Katrina are much bigger factors in shaping public attitudes, many Americans also see gasoline as a sore issue.

While the approval ratings for the Bush administration have risen somewhat from their lows of the early summer, the president’s declining popularity has generally mirrored the rise in gasoline prices, said Andrew Kohut, the president of the Pew Research Center.

“Rising gasoline prices have taken quite a toll on President Bush’s approval ratings,” Mr. Kohut said. “Of course there have been other issues — like Katrina and Iraq — but if you track the rise in gasoline prices it correlates very nicely with Bush’s falling ratings.”

The question now, he added, “is how much will declining prices obviate that clear negative?”

Gasoline prices, visible to consumers every day, are not necessarily crucial in their own right. But they have acted as a proxy for attitudes toward the general economy, which, Democrats argue, has worsened for the average American under President Bush.

“It’s a constant reminder that things are tough,” said Senator Jack Reed, a Democrat of Rhode Island. “Everything keeps going up and wages for middle-class Americans have been stuck for five years.”

In contrast to the previous energy shocks of the 1970’s and early 1980’s, however, the recent surge in oil prices did not seriously trip up the economy, sending it over the edge into a recession. The increase was driven by rising global demand, not by a supply shortage precipitated by events in the Middle East, and growth has continued right through the surge in prices.

Indeed, Americans are consuming more gasoline than ever, thanks to a growing population and an expanding economy. But the price increases have imposed a toll.

Gasoline demand in the United States is expected to rise just 1 percent this year, to 9.22 million barrels a day, according to the forecasts by the Energy Information Administration, compared with an annual growth of 1.9 percent from 1992 to 1999. Next year, the agency sees a rise of 1.2 percent in gasoline consumption.

“While gasoline demand has not declined, the growth has certainly declined from its longer-term trend,” said Tancred Lidderdale, a senior economist at the Energy Information Administration. “One thing I would suggest is that the impact of high prices isn’t immediate. Habits are slow to change.”

They are changing, though. Wal-Mart has said that its customers are making fewer trips to its stores. Automakers in Detroit have suffered big drops in the sale of their S.U.V.’s and pickup trucks as buyers turn to smaller, more efficient models. More drivers are carpooling or delaying some trips because of the impact of high prices.

In a New York Times/CBS poll taken in May, 63 percent of respondents said they had reduced their driving because of higher prices; 49 percent said they planned to change their holiday plans because of higher gas costs; 56 percent said that high energy costs had led to cutbacks in household spending.

“It’s hard on the middle class, on people like us,” Jean Smith, 59, a schoolteacher in Kennett Square, Pa., said this week. She said high energy costs were a burden on her family, which has $15,000 in debt, one son in college and another in the military. She and her husband, also a high-school teacher, earn a combined income of about $75,000 a year.

“Our gasoline and heating oil bills have doubled in the past 10 years,” she said, “but our salaries certainly haven’t.”