Over the course of the last two years, the cost of energy has skyrocketed. Since President Barack Obama took office, gas prices have doubled — with some cities averaging over $4 per gallon. These increases are crippling small businesses and American families. In fact, seven out of ten Americans indicate that the rising cost of energy has brought them financial hardships, according to a Washington Post/ABC News poll.
In addition, Wells Fargo yesterday released a survey that showed small business optimism declining for the first time in six months due to the surging oil prices. Wells Fargo Senior Economist Dr. Scott Anderson explains the pessimism by concluding that “weaker U.S. consumer spending in the first quarter, along with a spike in energy prices, is likely behind much of the slide in small business optimism since January.”
As chairman of the House Committee on Small Business, I am particularly concerned with the effect the rising cost of fuel prices has on America’s small businesses. A recent Internet-based product wholesaler survey reported that 64 percent of small businesses have incurred a revenue decrease as a result of rising fuel costs. Small firms are our job creators; they are the key to solving our nation’s unemployment problem and it is imperative that we create an economic climate that allows them to thrive.
American small businesses need to feel confident in stable energy prices so they can expand and create jobs. I believe the answer to our problem can be found in an “all of the above approach” that focuses on safely producing our own American energy resources. This includes more American-produced oil, natural gas, biofuels, coal and nuclear, along with alternative sources such as wind, solar, hydropower and geothermal. Producing more American energy will lower prices, create new American jobs, and reduce our dependence on foreign oil. I’m not the only one who agrees with this plan; 69 percent of Americans do, according to a recent CNN poll.
Several weeks ago, the House Committee on Small Business Subcommittee on Agriculture, Energy and Trade held a hearing to explore ways to minimize the impact high gas prices have on small businesses. Subcommittee Chairman Scott Tipton (R-CO) heard from several small business owners who agreed that rising fuel prices have affected their businesses and encouraged Congress to fully explore domestic resources. Dr. Robert Weiner, a professor at The George Washington University in Washington, D.C., testified that “to foster investment and future production, it is important to establish and implement clear, stable policy in the areas that affect petroleum the most — taxes and regulation. This is most easily seen for offshore drilling, but also affects new technologies.”
Behind the price of crude oil, taxes are the second largest component of retail gasoline costs. Any additional energy taxes will be passed along directly to the consumer, which will be detrimental to individuals and small businesses who are already struggling to make ends meet.
Development of our domestic resources would not only lower our energy costs, it would also help ease our unemployment problem. It is estimated that over 500,000 high-quality jobs would be created with this approach. Additionally, our small businesses — which employ over half of the country’s private sector workforce — would have the confidence to start hiring again.
My Republican colleagues and I are serious about getting the cost of energy under control. We should look for every avenue possible to lower the cost of energy and move America closer to energy independence.
Sam Graves is the U.S. Representative for Missouri’s 6th congressional district, serving since 2001, and serves as the Chairman of the House Small Business Committee.