Obama and McCain Trade Barbs Over Gas Prices

This is a rush transcript from "The O'Reilly Factor," June 13, 2008. This copy may not be in its final form and may be updated.

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LAURA INGRAHAM, GUEST HOST: In the "Campaign '08" segment tonight: rising gas prices and moving the country toward energy independence. Those two issues are emerging as key in November's election, and sparks are flying over it on the campaign trail.

(BEGIN VIDEO CLIP)

BARACK OBAMA: We've been consuming energy as if it's infinite. And we now know that our demand is badly outstripping supply with China and India, growing as rapidly as they are.

UNIDENTIFIED MALE: So could stock prices help us?

OBAMA: I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing.

MCCAIN: Senator Obama said yesterday, well, he didn't seem to mind the cost increase. It was just a little too quick. Well, a lot of Americans mind.

(END VIDEO CLIP)

INGRAHAM: Joining us now from Virginia is Nancy Pfotenhauer, who's the domestic policy adviser to Senator McCain, and from Los Angeles, Obama supporter Matthew Littman. And Matthew and Nancy, great to have you with us.

Matthew, let's start with you because Senator Obama had some pretty strong words today about McCain's tax plan, his economic outlook. But my question to you is if Obama is complaining about supply outstripping demand, why won't Barack Obama urge Congress to break this deadlock and move forward and at least explore the possibility of drilling in ANWR, where we know there are 20 billion barrels of oil underneath the surface of 2,000 acres. Why won't he do it?

MATTHEW LITTMAN, OBAMA SUPPORTER: Well, what good would it do? We wouldn't get that gasoline from ANWR for 10 years, even if we started drilling tomorrow. So for the next 10 years, what are we going to do?

We need to have a comprehensive energy plan that starts right now. Ten years from now, gas prices, I don't know what gas prices are going to be, but they're going to continue to go up and up and up. So drilling in ANWR is a long-term solution. But in the short term and the long term, we need to figure out what to do about — with an energy plan. We haven't had one for the last eight years.

INGRAHAM: Well, Nancy...

LITTMAN: Drilling in ANWR doesn't do any good.

INGRAHAM: Well, Nancy, I believe in a comprehensive approach to this as well. However, the facts are that in ANWR, if we were to explore, get those barrels of oil out of that ground, we would be free of Saudi imports for 25 to 50 years by some estimates. Twenty-five to 50 years. Yes, those are the facts, Matthew.

So if that's the case, why is John McCain wrong on this? We have a case where Obama and McCain are both failing to do what the American people want, which is to explore for oil where we can and do so responsibly.

NANCY PFOTENHAUER, MCCAIN ADVISER: Well, let me agree and disagree with you, Laura. Senator McCain does not support drilling in ANWR at this time, but he's a very strong supporter of increasing domestic production. I mean, he supports increasing drilling where we already have it, and that's actually the quickest way to get the barrels out of the ground if you will.

And I would contrast that with Senator Obama's plan, which I call the perfect storm on energy prices, he wants to raise taxes on oil, wants to raise taxes on natural gas, and wants to raise prices on — taxes rather on coal.

This is a trifecta of bad economic policy. And just look at the windfall profits tax that he's most recently proposed. It is preposterous to propose that at a time when gas prices are this high. It's been tried before. What it does is lower domestic production and raise prices to consumers.

INGRAHAM: And Matthew...

(CROSSTALK)

INGRAHAM: We're all on. You can respond, but let me just ask you a question and you can respond within the question.

LITTMAN: OK.

INGRAHAM: Isn't it a little problematic for Senator Obama to be pushing oh, let's go after big oil and let's have windfall profit taxes? Doesn't that play into John McCain saying this is just another Carter term? So this is the second Carter term. You say on the third Bush term. And isn't that just the same old, same old there? I mean, we've heard these solutions before from the Democrats, and they really haven't worked. We tried them in the '70s.

LITTMAN: Well, we haven't heard these solutions before in terms of Barack Obama's energy policy, which is a lot different. I was 9 years old when Jimmy Carter was president, so I don't have a lot...

INGRAHAM: You're lucky. You didn't have to wait in line for gasoline.

LITTMAN: I don't have a lot to say about Jimmy Carter's presidency, but look, Exxon Mobil makes what, you know, 10 — let's say they make $10 billion. I think...

INGRAHAM: So what?

LITTMAN: …how much they can profit a year. Well, why do they deserve $3 billion in more tax cuts per year? I mean, that's ridiculous. They're already making $10 billion a year. Why should...

INGRAHAM: Matthew, what I don't understand is Democrats act like these oil companies don't pay billions of dollars in taxes. I mean, you make it difficult enough for businesses in this country, and I think Democrats are going to be scratching their heads saying, gee, I wonder why people don't want to start businesses in the United States because they're demonized when there are years where they don't make these profits.

And right now, the return on the dollar for these oil companies is about nine percent, which is, you know, it's not fantastic. It's not terrible. But over the course of time, it's about a nine percent return on investment, on all the things we have to do to get that oil out of the ground or explore for it. So I would be very careful in saying that oh, these terrible oil companies. I think that is just — that is so cheap style politics. And both candidates do it.

Like Nancy, I got to tell you, I just think McCain is missing the boat here. He's missing an opportunity to hit it out of the park. If I were he on Fourth of July, I would stand there at a gas station and say you're paying these prices because Democrats are putting roadblocks in the way of exploring domestically. Period.

PFOTENHAUER: Well, and he does say that. I mean, essentially, Barack Obama is hanging our energy future on fuels and technologies that are still in the lab. And he's against everything that is safe and proven and available right now, like drilling for oil and natural gas, and co-production. We're the Saudi Arabia of coal.

And at the same time, Senator Obama is rattling sabers at Canada and Mexico, who are the friendliest, who supply us with 33 percent of our imported oil. I mean, his policies are incoherent, and they are going to hurt consumers. And that's a huge problem when you think about the fact that every good and service, virtually every good and service that you get in this economy has some portion of the cost attributed to energy. You raise energy prices, you raise the price of every good and service.

INGRAHAM: Absolutely. Matthew, last word. Go ahead.

LITTMAN: What are the differences between John McCain policies and George Bush's policies? My gas prices here in Los Angeles of $4.50 for unleaded, they've gone up from $2.00. Are you telling me that John McCain is no difference in his policies than George Bush?

If you want to talk about going back to Jimmy Carter, John McCain is the same policies that we've had for 25 years. They don't work. We need a new energy policy. And let's remember that's McCain who said he doesn't know a lot about the economy. And he's going to read Alan Greenspan's book. He said that three, four months ago.

INGRAHAM: Well, Matthew, I know you as a good liberal. You can drive that Vespa scooter to work. So the gas is not...

LITTMAN: A Prius, your close enough.

INGRAHAM: Just teasing you. I'm just teasing you.

All right. Nancy, Matthew, I appreciate it. Thanks a lot.

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