Sunday, July 06, 2008

by Congressman Adrian Smith

In 1979, President Carter gave what has become famously known as the “malaise speech,” in which he tried to address the nation’s concerns about the economy 

President Bush recently put it more plainly, saying during a news conference, “it’s a tough time for our economy.”  Rather than burying our heads in the ground, though, Congress must now face these challenges head on.

One major challenge is of course the price of fuel.  It seems everyday, the price at the pump hits a new record high – with regular unleaded clocking in at $3.62 a gallon on May 1^st.  Americans are currently paying an average of $1.29 a gallon more than they were paying when the current Democratic majority promised to provide “real solutions” to lower gas prices. 

Nationwide the average price of diesel is up to $4.25 – a $1.58 increase in just 18 months.

At the time of this writing, the price of gas is $3.43 in Grand Island, $3.49 in Kearney, $3.45 in Ogallala and in Scottsbluff it hits $3.47.  Diesel in Grand Island is $4.13.

Some ideas floated in Congress and on the presidential trail don’t address the roots of our energy problems.  Prices are higher today primarily because demand is outpacing supply in a global marketplace which contains very little surplus production capacity. 

The United States now imports about 60 percent of its oil, up from 42 percent in 1990.  We could be producing more domestically, but large areas of potential supply are off-limits.  These areas include the Atlantic and Pacific coasts and parts of Alaska and the Gulf of Mexico.

It is estimated these areas may contain 25-30 billion barrels of oil and 80 trillion cubic feet or more of natural gas. 

The world uses 86 million barrels of oil a day, up from 67 million barrels a day in 1990.  And that number is just going to keep going up due to increasing demands in growing industrial countries like China and India.

The only way we are going to be able to provide for lower fuel costs in the future is to increase and diversify our domestic energy supply. 

Unfortunately, special-interest groups have said ‘no’ to virtually every solution, including clean, renewable hydropower; non-emitting nuclear power; clean coal technology; wind power; and domestic exploration.

Beyond the hammering Americans are taking at the gas stations, our economy is dealing with a crisis in the housing market. 

As a result of outdated policy, aggravated by the increased availability of adjustable rate mortgages, many homebuyers are at risk of foreclosure.

Nebraska has one of the lowest rates of foreclosure in the nation – only one foreclosure-related filing for every 2,800 households compared to the nationwide average of one out of every 540 households.  This is the direct result of responsible borrowing and lending practices, coupled with the good-old fashioned common sense Nebraska’s famous for. 

While I’m sympathetic to those caught up in this crisis, I have serious reservations about any federal government attempt to stabilize the housing market through a massive ‘bailout.’ 

There is a fine line between helping the industry without dangerously over-reaching and encouraging irresponsible borrowing and lending.  We need to take an approach which avoids any form of tax-funded bailout to speculators – essentially awarding fiscal irresponsibility. 

Housing is a long term investment, and homeownership helps foster a sense of community.

We should strive to make buying a home attainable for every American, but congressional oversight must exist to ensure federal regulations reinforce strong mortgage markets and encourage personal and fiscal responsibility.

The challenges facing our economy are serious, of that there is no doubt.  But by working together with open minds, we can find common ground and workable solutions for now, and for future generations.