Senate Dems: GOP spending cuts will lead to higher gas prices

Senate Democrats are accusing Republicans of pushing spending cuts that will lead to higher energy prices.

In a letter Tuesday to House and Senate GOP leaders, the bulk of the caucus, including its leaders, take aim at House-passed spending legislation that would cut funding for the Commodity Futures Trading Commission, which polices oil futures markets. 

“As we work toward a long-term budget compromise to keep the government running through this year, we urge you to abandon the reckless energy proposals in the House-passed Continuing Resolution (H.R 1) that will condemn our country to continued reliance on foreign oil and allow market manipulation that could lead to gas prices rising unchecked,” states the letter from 48 Democrats, including Majority Leader Harry Reid (D-Nev.), Majority Whip Dick Durbin (D-Ill.) and other Democratic leaders.

{mosads}Many Democrats allege that speculative trading is pushing prices higher than supply-and-demand fundamentals dictate. 

A House GOP plan to fund the government through the end of fiscal year 2011 would slash almost $57 million from the CFTC’s budget compared to fiscal year 2010 spending levels. The measure passed the House last month.

CFTC Chairman Gary Gensler has said the House GOP cuts, if enacted, would make his agency less effective.

“At a time where gas prices are rising and squeezing American families, we have a responsibility to provide our watchdogs the resources they need to fulfill their important oversight and regulatory responsibilities,” the letter states.

Gasoline prices are currently averaging almost $3.55 per gallon, up from roughly $3.17 a month ago and $2.82 at this time last year, according to AAA.

The letter also attacks GOP proposals to cut green-energy research and development programs.

“We stand ready to work with you to come to a responsible budget compromise that will not do anything to make our gas price problem worse, or undermine the progress we are making in developing the clean energy technologies we need so we can better compete with countries like China,” the letter states.

The House and Senate have passed short-term spending bills in recent weeks as the parties negotiate over the budget for the balance of the fiscal year that runs through September.

High oil-and-gasoline prices are reviving partisan battles on display when these prices soared to record levels in 2008.

Republicans are bashing the Obama administration’s limits on offshore oil-and-gas drilling, while many Democrats say Wall Street speculators are to blame, and that oil companies are not sufficiently developing areas they already have under lease.