Gas Price Gouging Vote Passes As Bush Voices Opposition to Tax Cuts

President Bush met with lawmakers from both parties on Wednesday to lay out some short and long term solutions for what White House aides now acknowledge is a national energy crisis.

Among the solutions discussed are increasing research on alternative fuels and building new refineries to process crude oil. Bush said not much can be done to alleviate high gas prices in the short term except to get motivated for the road ahead.

"The price of gasoline should serve as a wake-up call to all of us that we've got an energy security problem and a national security problem. Now's the time to deal with it in a forceful way," Bush said.

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As gas prices average $2.91 nationwide, according to the Energy Department, the House approved a bill that would impose criminal penalties and fines of up to $150 million for energy companies caught price gouging. It failed to pass by the two-thirds vote needed a measure to increase refinery production by making it easier for companies to get into the business. That vote was 237-188.

The price gouging legislation passed 389-34. It must now go to the Senate for a vote. The White House has not weighed in on the legislation.

Before the vote, lawmakers looking for ways to get ahead of public outrage before the November midterm election expressed their support.

"This is one thing we have to do," said Rep. Heather Wilson, R-N.M., chief sponsor of the bill that for the first time would create a federal law on energy price gouging. The legislation is supported by state attorneys general.

"American consumers are demanding protection from price gouging," said Rep. Sherwood Boehlert, R-N.Y., in floor debate.

With the nation in an otherwise booming economic period, Americans are citing high gas price as among their top concerns right now, and by a nearly a two-to-one margin trust Democrats more to deal with the problem, according to recent polls.

Democrats are sure to raise the issue in the fall elections. The president and Republican leaders are trying to buttress anger against the majority party by crafting a strategy that will help take the sting out of prices. Senate Republicans on Tuesday suggested a $100 per driver rebate to help pay for gas. House Majority Leader John Boehner called the suggestion insulting.

Republicans have also supported extending the tax cuts on dividends and capital gains, which Bush promoted earlier in the day by saying letting them expire would amount to a tax hike at a time when Americans don't need higher expenses.

"At a time of high gasoline prices, I know energy prices are on your mind, like a lot of other folks. At a time when there's growing competition in the world, the last thing the American people need is a tax hike," he said.

Democrats widely support the price gouging measure, but some criticized Bush for saying that looking at oil companies was turning in the wrong direction from the problem of high prices. Still, he called on the Federal Trade Commission and the Justice Department to investigate.

Supporters of the refinery bill said delays in permitting have kept industry from building new refineries. Opponents, however, argued the bill would reduce environmental protections.

Rep. Rick Boucher, D-Va., said slow permitting is not preventing refinery construction.

"The real reason we have a refinery shortage is the companies that own refineries are profiting enormously from the ... refinery bottlenecks," said Boucher.

The gouging legislation calls for penalties of up to $150 million for refiners and other wholesalers and $2 million for retailers. It covers marketers of gasoline, diesel fuel, crude oil and heating fuel.

Wholesalers and retail outlets such as corner gas stations and service station chains face penalties triple the amount of their unfair profit. Violators also could go to jail.

The measure also calls on the Federal Trade Commission to develop a definition of price gouging and pursue civil penalties if violations occur. Criminal prosecution would be up to the Justice Department and states.

Rex W. Tillerson, chairman and CEO of Exxon Mobil Corp., defended the company's record profits and high gas prices in an interview on NBC's "Today" show Wednesday. His company earned more than $8 billion in profits in the first quarter of this calendar year.

"Obviously, the truth is we do not get together and manipulate prices, that would be illegal," he said.

"The profit we earn is what the market gives us ... the price is set on the open market," Tillerson said.

Currently the FTC has the authority to investigate suspected collusion by oil companies under federal antitrust law. The oil industry argues that numerous investigations by the FTC in the past have never resulted in conclusions of price manipulation.

FOX News' Wendell Goler and The Associated Press contributed to this report.

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