As the midterms near, the White House is in a frenzy about OPEC’s decision to slash oil production by 2 million barrels a day. The decision will, if it leads to oil price spikes, further enrich the Saudis, and further empower Putin’s vicious regime. It will also increase upward pressures on inflation here in the United States, just at the time when the administration and its allies in Congress desperately need to convince voters that they have a strong grip on the country’s economic reins.
To have any hope of retaining a majority in the House of Representatives, Democrats need to thread a series of needles over the coming weeks. They have to keep a strong focus on abortion and on Donald Trump’s escalating attack on the country’s democratic system of governance, since on both issues independents are more likely to break the Democrats’ way. They have to show that inflation, which polls have consistently shown is voters’ number-one concern in this election season, is coming back under control—and that it is doing so via a so-called “soft landing,” despite the Federal Reserve’s increasingly aggressive interest rate hikes, which risk tanking both the housing and the job market. They also have to prove that in key swing districts the Democrats truly have their voters’ backs.
Which brings me to California, and the handful of swing districts controlled by Democrats that the party needs to hold, along with the other handful controlled by Republicans that the Democrats desperately need to flip to counter expected losses elsewhere in the country.
Most of these districts are either in the Central Valley or in the Los Angeles/Orange County suburbs, both areas where people drive a lot. To my mind, the single biggest risk the Democrats face as they try to retain control of Congress is soaring gas prices in California.
For the past two weeks, a combination of local refinery outages, California’s unique fuel refining requirements, a regimen of high gas taxes, and, according to Governor Gavin Newsom, energy industry profiteering, have caused pump prices to soar in the Golden State, racing past the $7 mark in some regions.
Nationally, as of Wednesday of this week, the average price of a gallon of regular gasoline was $3.83. In California, by contrast, it was $6.42. For a low-income worker, say a farmworker driving a pickup truck long distances in a remote rural area, that could easily translate to a $100-per-week surcharge over what they would be paying if they lived elsewhere.
Governor Newsom has responded by launching inquiries into oil industry price gouging, and by promising to implement windfall taxes against profiteering energy companies. In late September, his office put out a statement noting, “At the end of August, crude oil prices were roughly $100 per barrel, and the average gas price in California was $5.06; now, even though the price of oil has decreased to $85 per barrel, the average gas price at the pump has surged to $6.29.” The California Energy Commission has also stepped into the fray, demanding answers of oil executives as to why California’s prices have spiked so much more than those elsewhere in the country. But Newsom’s threats to the oil industry and the CEC’s fury seem to have fallen on deaf ears. Since late September, prices in the Golden State have only continued their relentless northward march.
Newsom has directed the state’s air resources board to allow refineries to start producing their cheaper (but marginally more polluting) winter blends a month early, in the hope that this will relieve price pressures at the pump. After months of delays, the state is finally about to start issuing hundreds of dollars of credits to taxpayers—some lower-income homes could receive as much as $1,050—either directly deposited into their bank accounts or sent to them on EBT cards, to offset at least some of the burden of higher gas prices. It’s a $9 billion-plus program, and will go some way toward alleviating the worst hardships caused by the gas price spikes.
These are all necessary interventions, but even taken as a whole they won’t come anywhere near to canceling out the pain caused to low-income drivers by California’s absurdly high gas prices, especially to those who haven’t been able to upgrade to more fuel-efficient vehicles in recent years. Yes, California has a higher-than-average median income, and yes, it has a $15-per-hour minimum wage, which is more than double the federal minimum, but it also has extremely high housing prices and other cost-of-living expenses that cancel out much of that additional income. Add high gas prices into the mix, and many at the bottom of California’s economy simply cannot balance their family finances.
Writing in The Nation in 2005, during a previous round of gas price hikes, I suggested that the federal government should create a gas stamps program, modeled on food stamps, that would largely subsidize gas purchases for low-income residents during market upheavals. Back then, rural towns in California were being hammered by gas prices that had reached nearly $3.50 a gallon. Today, gas prices are more than double that, but the median family income in the state has increased by far less—from roughly $51,000 to $81,000—during those 17 years. As a result, those Californians not affluent enough to upgrade to more fuel-efficient cars are spending a higher proportion of their income on gas in 2022 than they were during earlier gas price spikes, and a far higher proportion than they do when gas is at more “normal” price levels. And yet there still aren’t federal subsidies—and only inadequate state subsidies—available to tide low-income Americans over.
If the Democrats don’t want to be blamed for this, they need, as a matter of urgency, to legislate gas-purchasing subsidies for lower-income residents that kick in during periods of extreme price volatility, as well as to use other tools to rein in energy industry profits. Otherwise, in California’s swing districts and elsewhere, they risk ending up on the wrong end of voter fury at gasoline prices that, by the day, are becoming more unaffordable.
Recent polling suggests that 29 percent of California voters regard inflation and broader economic malaise as their chief issue of concern. It has displaced housing and homelessness at the top of voters’ list of worries. Similar polling holds around the country, including in the critical swing state of Arizona, where Phoenix-based OH Predictive Insights pollster Mike Noble recently told me his findings suggest that “inflation out-trumps abortion,” and where gas prices have also been rising in recent weeks.
For more than a year now, poll after poll has shown that, by large margins, voters blame Biden and Democrats in Congress for policies that have worsened the inflationary spiral. There are vulnerable Democrats in California’s ninth, 13th, and 49th congressional districts, and vulnerable Republicans in the 22nd and 41st districts. In Arizona, too, there are several critical swing seats in play in congressional races. If gas prices continue to surge in California, in Arizona, and elsewhere, and if, in consequence, these seats don’t end up Democratic come election night, Kevin McCarthy will likely be the next speaker of the House. On many, many levels, that would be a tragedy for American democracy.