California Gov. Gavin Newsom (D) has been thwarted by the Democrat-dominated state legislature in his effort to punish oil and gas companies for alleged fuel price gouging, and will now turn to executive actions instead.
The change in strategy is a political failure for Newsom, whose party enjoys a supermajority in both houses of the state legislature, and could theoretically push through anything that he wanted without much opposition.
Last year, amid soaring gas prices, Newsom and the legislature sent “inflation relief checks” to many California families to help pay for the cost of fuel. (The state’s Democrats declined to abandon a scheduled gas tax hike.) The checks, welcomed by some, were predicted to cause even more inflation. They were also subject to scams and may have accidentally raised federal tax liabilities for the recipients, because they were not actual refunds.
Newsom tried blaming oil and gas companies for the high price of fuel, calling the legislature into a special session to pass laws to punish the industry. But he had to redefine his proposal as a “penalty” rather than a “tax” to avoid a rule in the California state constitution requiring tax hikes to pass by a two-thirds majority. Lawmakers and legal experts apparently struggled to find a legislative formula to match Newson’s proposal.
Now, following the example first set by President Barack Obama on immigration policy and gun control, Newsom is abandoning the legislature, and intends to take executive action to limit oil and gas industry profits.
The Associated Press reports:
California Gov. Gavin Newsom said Wednesday he wants state regulators to decide whether to impose the nation’s first penalty on oil companies for price gouging, pivoting after months of negotiations with legislative leaders failed to reach an agreement on a bill aimed at reining in the state’s notoriously high gas prices.
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Wednesday, the governor announced he was changing course and instead will ask lawmakers to empower the California Energy Commission to decide whether such a penalty is necessary and, if it is, how much it would be. The commission would be aided by a new, independent agency made up of experts, economists and lawyers that would have subpoena power to monitor the gasoline market and make recommendations.
The oil industry has pushed back against Newsom’s accusations of price gouging, arguing that state policies themselves are responsible for high prices because they require a unique blend of fuel to be sold, which few refineries produce; and because of California’s aggressive climate change policy, which imposes a cap-and-trade system on fuel and aims ultimately to end the production and sale of gas-powered vehicles within the state.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the new biography, Rhoda: ‘Comrade Kadalie, You Are Out of Order’. He is also the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
This article has been updated.