White House monitoring drop in oil prices, stocks

The Obama administration is monitoring whether the fall in oil prices is affecting the U.S. stock market, White House press secretary Josh Earnest said Monday as the Dow Jones industrial average plunged more than 300 points.

{mosads}”We’re always monitoring the impact that any sort of policy area would have on the economy,” Earnest said. “So it’s certainly something that we’re watching.”

But the spokesman said he was “hesitant” to say whether the falling stocks, which came as crude oil trades briefly dipped below $50, was related to oil prices. Oil prices have declined nearly by half since the summer, and Monday was the first time crude oil slipped below $50 a barrel since 2009.

“I’m always very hesitant to draw any conclusions or offer any analysis about movements in the stock market,” Earnest said. “I know that there are some who have observed — this is a little bit of a chicken and the egg thing — that some of the fall in energy prices is a direct response to a weakening of the economy and a fall in the stock market.”

But, Earnest said, “as a general matter,” falling energy prices have been “good for the U.S. economy.”

The White House also declined to weigh in on proposals from lawmakers, including one from Sens. Bob Corker (R-Tenn.) and Chris Murphy (D-Conn.), that would raise the gas tax to fund infrastructure improvements. That legislation is perceived as more politically viable now with gas prices under $2 per gallon in much of the country.

“We’ll certainly consider proposals that are put forward,” Earnest said, adding that the White House continues to believe a deal to close corporate tax loopholes is the best way to fund infrastructure projects.

“We don’t believe that the best way to fund modernizing our infrastructure is to raise the gas tax,” Earnest said. “But some people do, and we’re willing to consider those proposals. We believe that the best way to do that is to close those loopholes that only benefit the wealthy and well-connected corporations.”