Monday’s threat by President Biden was to propose a special “windfall profits tax” on oil companies that he called “war profiteering”. This is as gasoline prices continue their downward spiral on Democrats heading into the midterm elections next week.

Biden spoke for only five minutes at White House and didn’t mention a specific tax rate. He said that voters would be hearing more about it after the election.

“The record profits of oil companies today are not due to doing something innovative or new. Biden claimed that their profits are a result of war, a windfall from the horrific conflict in Ukraine, which has left millions of people worldwide suffering.

He said, “You know that in a time war, any company getting historic windfall profits such as this has to take responsibility for acting beyond the narrow self-interests of its shareholders and executives.”

They have a responsibility for their consumers and communities to invest in America. If they don’t want or can, they have the chance to increase production and refine capacity. This will lower prices for consumers at their pumps. They will have to pay higher taxes on excess profits, and may face other restrictions if they don’t.

Biden claimed that higher corporate profits than normal could be explained by $0.50 per gallon consumer costs.

The president continued, “My team will collaborate with Congress to examine these options that are available for us and other,” he said.

Biden stated that it was time for the companies to end war profiteering and fulfill their responsibilities to the country. He also said that they should give the American people a break while still doing very well. “The American people will judge who stands with them and who only cares about their bottom line.

Biden’s attempts to lower gas prices prior to the election — including his efforts to press Saudi Arabia to delay a production reduction and to release oil from the US Strategic Petroleum Reserve – have angered Republicans who claim the president is trying manipulate prices to his benefit while shifting blame for higher prices. Critics repeatedly pointed out Biden’s efforts to reduce oil production last year as part a enivronmental agenda. This included an attempt to impose a moratorium upon new oil and natural gas leases on federal lands, the cancellation of the Keystone XL pipeline project from Canada to the US, and banning oil drilling at the Arctic National Wildlife Refuge.

Ronna Romney McDaniel, Chair of the Republican National Committee, stated in a statement following the speech that Joe Biden was lying.

She stated that Biden had attacked American energy since his first day as an office holder. He did this with the support of congressional Democrats. “Americans are well aware that gas prices have risen, groceries are more costly, and wages have fallen under the leadership of Biden and Democrats.” Voting Republican is the best way to lower gas prices.

Rep. Kevin Brady (R.Texas), who is the ranking member on the House Ways and Means Committee, asked: “Haven’t American families suffered enough under President Biden’s damaging attack against American-made energy?” “Desperately trying salvage the midterm elections, he now proposes another dangerous policy which will increase energy prices and create energy poverty while making America more susceptible to foreign countries for our daily fuel needs.”

Brady called the proposal “a Jimmy Carter-era tax increase” and said that the nonpartisan Tax Foundation had warned, “The last time the U.S. implemented windfall profit taxes in 1980 it resulted in lower domestic production as well as a greater dependence on imports.”

While oil companies’ profits are higher than normal, they are just one aspect of the overall rise in consumer prices this year, which is the most sustained inflation since 1981. Average consumer prices in the US were 8.2% higher than last year.

Biden named some oil companies.

He stated that “one by one major oil companies reported records profits, not just fair returns… I mean profits too high it’s difficult to believe.”

“Last week Shell announced that it had made $9.5 billion in third quarter profits… this is almost twice the amount it made in last year’s third quarter ….. then along came Exxon. Exxon’s third quarter profits were $18.7 Billion. This is nearly three times what Exxon earned last year, and more than any other quarter in its 152-year history.

Biden said, “In the past six months, six largest oil companies have earned more than $100 billion — $100 Billion in profits in less that 200 days.” This is not bad.

Exxon, the US’s largest oil company, stated that its third quarter earnings were $5.3B higher than 2021’s due to “stronger industry refining margins and positive derivative mark-to market effects and higher volumes”. Exxon also spent $3.7B on dividends and $4.5B on buybacks that could increase stock value.

Due to the Senate’s 60-vote threshold and the narrow margin of Democratic control in the House, the president’s threat to levy a windfall income tax is unlikely to come true. To regain the majority in the House, Republicans must win just five seats — and need to flip one seat to gain the Senate.

According to polls, economic woes have proved to be a problem for Biden and his Democratic allies. CNBC released a survey this month that found only 16% said the economy is either “excellent” (or “good”), and 59% predicted a recession.

The poll found that only 40% of voters approve Biden’s economic management, despite the fact that this figure was down 10 percentage points from July’s pathetic 30%.

The Federal Reserve’s interest rates hikes this year, in addition to the high inflation, are raising the cost of consumer borrowing, such as mortgages.

According to AAA data, the average price of a gallon regular gas in the United States was $3.76. This is lower than the June record highs of $5, but up substantially from last year’s $3.40.

Biden, who announced this month that he would release 15 million more barrels of oil from US Strategic Petroleum Reserve in Dec — for a total 180 million barrels from this year’s SPR — after the Saudi-led OPEC+ cartel rebuffed his appeal and decided to reduce production by 2,000,000 barrels per day.

The House Republicans proposed Biden’s potential impeachment next spring to ask Saudi Arabia to delay OPEC+ cuts until after election — with No. 3 House Republican Rep. Elise Stefanik, R-NY, called it “very egregious and inappropriate and illegal actions by the president.”