• This is a rush transcript from "Your World with Neil Cavuto," May 8, 2008. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: This, too, by the way, could be ringing a bell for you, gas at a record again, regular unleaded now $3.65 a gallon.

    And while the Street is taking it in stride — the Dow was up a little bit more than 50 points today — my next guest says Main Street definitely is not. And Newt Gingrich says it won't be Democrats, but Republicans, to pay the price if those prices don't come down.

    The former speaker and author of "Days of Infamy," among so many other bestsellers, here to explain.

    CAVUTO: Democrats are in charge of Congress, though.


    CAVUTO: So, why would Republicans...


    GINGRICH: But the country thinks the Republican president was in charge. And the country thinks that a lot of the things that we're currently having problems with were the Republicans' fault.

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    And if you look at all the polls, if you look at the loss of the seat last Saturday in Louisiana in a special election, the loss of the seat six weeks ago in Illinois, Speaker Hastert's seat, the country right now is saying they want to try the Democrats.

    Now, the fact is, the Democrats have had no answers. In fact, you could make a pretty good argument most of the current energy problem is created by politicians. I mean, it's politicians who set the tax law. It's politicians who made it illegal to go look for gas and oil in the U.S.

    And, so, I think that, if gasoline prices keep going up, at some point, you are going to see a dramatic change in the whole debate over energy in the United States, I think. But the Republicans ought to be leading that debate.

    Now, Congressman Paul Ryan today is introducing a bill which provides for a gas tax holiday this summer and pays for it by setting a one-year moratorium on set-asides and earmarks in the appropriations bill. So, he actually takes the money away from politicians in order to cut gasoline...


    CAVUTO: But that is sort of like intangible stuff to most voters, is it not? I mean, they want to see immediate relief at the pump. And, if you're right — by the way, Minority Leader Boehner disagreed with your view of things today — then it does not matter, unless it is an immediate relief.

    GINGRICH: Well, I think, first of all, something which brought down the price of gasoline 10, 15, 20 cents is a step in the right direction.

    CAVUTO: So, a federal gas tax holiday is that?

    GINGRICH: I think a gas tax holiday, if it's paid for with spending cuts, is a good idea.

    CAVUTO: So, not Hillary's route, paying for it with taxes on the profits of the oil companies?

    GINGRICH: Well, the last time we had a windfall profit tax on the oil companies, we reduced gasoline production in the U.S. by 13 percent.

    Now, if you think the smart way is to make America more dependent on foreign dictators and have to import more oil, then Senator Clinton's tax increase makes perfect sense. But you ought to be honest about what it is going to do. It's going to drive production offshore. It's going to weaken the American production of energy. And it's going to make us more dependent on foreign dictators.


    CAVUTO: But you are for reducing the federal gas tax?


    GINGRICH: I am for reducing it for the summer and paying for it with spending cuts. I am also for stopping the purchase or putting gasoline and oil in the Strategic Petroleum Reserve.

    CAVUTO: Well, it is almost full now, right?

    GINGRICH: Well, that is right. And the 76,000 barrels a day probably, at the margin, would bring prices down about five cents a gallon. So, it would be...

    CAVUTO: In other words, money — oil we're putting in that, if on the market...

    GINGRICH: If we put it back on the market, it helps.

    CAVUTO: Yes.



    CAVUTO: But what if it does not, Newt? I see your point about this. I agree with you, by the way. It would hurt the party that controls the White House, just like energy crises in the past have hurt whoever occupies the White House.

    But what — what could turn it around?

    GINGRICH: Look, there is one big fact that nobody in American politics wants to get into.

    Brazil, in the last 18 months, has found three giant oil fields in the Atlantic Ocean. And that makes Brazil independent of the Middle East.

    Now, it is illegal today to drill in the Atlantic Ocean. It is illegal today to drill in the eastern Gulf of Mexico. It is illegal today to drill in the Pacific. And it is illegal to drill in northern Alaska. And then we say, gosh, why do we have an energy problem?

    My guess is, if you made it legal, and if you allowed the states to have the same percent of offshore revenue that Wyoming gets for mineral rights onshore, you would have a dramatic rush to produce new American oil and gas, and you would see a dramatic decline in the cost of energy.

    CAVUTO: But you mentioned Brazil. There is a country that has found another alternative.