WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, today joined Squawk Box on CNBC to discuss today’s Senate Banking Committee hearing, where he will question Federal Reserve Chair Jerome Powell, and President Joe Biden’s reported plan to call on Congress to suspend the federal gas tax.
Partial Transcript
Hagerty on his questioning of Fed Chair Powell today: “I think Chairman [Jerome] Powell is facing a very difficult set of circumstances right now. He’s got to find a way to thread the needle to deal with a challenging set of fiscal policies here in America, a challenging set of constraints around the globe, and the fact that the Fed [Federal Reserve] has gotten behind the curve. I was asking Chair Powell more than a year ago to begin the process of unwinding this balance sheet. I want to understand how that’s going now that they’ve finally gotten around to doing it a year later, but he’s got to move carefully. We’re at the precipice of a recession right now. I think he finds himself at a very challenging point, and I’m very interested to hear about the tools that he’s going to use, the pace that he’s going to deploy them, and again, how he’s going to navigate a very challenging set of fiscal challenges presented by this Administration, primarily with respect to their war on oil and gas here in America.”
Hagerty on Biden’s anti-American-energy policies fueling inflation: “I think [Senator] Joe Manchin is correct. The stimulus came—the most recent stimulus in March of 2021—came at a time when the economy was already reacting in a very positive manner. It was moving in the right direction. That [stimulus] caused an immediate overheating. I warned about this at that point in time. It was inherently inflationary. That stimulus was not needed at that point in time, and it was like throwing fuel on the fire. But I think the deeper cause right here are the policies that the Biden Administration has put in place that essentially has waged war on the oil and gas industry. If you think about it—whether it’s gasoline, diesel fuel, jet fuel—every aspect of that economy—the oil and gas economy—has been driven upward, and that’s had a very devastating impact on inflation here in America because every good has to be transported. You think about what’s happened with diesel fuel. Everybody in my home state of Tennessee’s got to drive to work. This is extraordinarily painful, and every American right now looks at the pain they’re feeling at the pump, and whether it’s the tourism industry, which is very big in my state, people have got to fly in with much more expensive jet fuel, or drive, it’s extraordinarily painful right now.”
Hagerty on Biden’s reported call for a gas tax holiday: “To be fair, before the Biden Administration came into office, we were looking at gas prices that were just above $2 a gallon. If you think about our own domestic economy, we were energy independent, were actually at a point where we were exporting energy from America. So, this has been self-inflicted. And the gas tax holiday that’s being discussed right now may have a short-term impact—I’m sure it’s been poll tested—but this is a political gimmick. Even Barack Obama described a play like this as a political gimmick designed for the midterm elections. It’s not going to have a long-term impact.”
Hagerty on what could be done to bring down gas prices and curtail inflation: “There is a lot that can be done, but again, you have to set aside the rhetoric of this Administration and go back to what’s happened. The small refinery exemptions that were taken away back from… several years ago under the Trump Administration, retroactive penalties were imposed on small refineries. It’s going to put those refineries out of business. We are very tight on refinery capacity right now. There’s simple things that we can do in terms of changing the blending rules that will have a dramatic impact on our capacity. But we also need to send a strong message to the capital markets that this Administration is not going to attack any return on investment. Again, this very clear message has been sent from the Biden Administration that they’re going to deny any sort of long-term investment in the oil and gas industry, a return on that investment. So, we need to get back and send a very clear and strong message that oil and gas production is going to be supported. It should be an all of the above approach to energy here in America. I’m not against alternate energy. Certainly, we’ve got a lot of activity and a lot of innovation that’s taking place there, but we should not be killing oil and gas in the meantime.”
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