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By Glenn Somerville
KANSAS CITY, Mo. (Reuters) - U.S. Treasury Secretary John Snow on Monday
warned that rising energy prices posed a risk to what he said was a
solid economic growth outlook and called OPEC (news - web sites)'s production
cuts "most" unwelcome.
Snow, in Kansas City for a day of public events, said the Bush administration
has told members of the Organization of Petroleum Exporting Countries
of its displeasure over members' agreed cuts in output quotas.
"We're very concerned and the actions by OPEC in reducing its quota
are most unwelcome," Snow said in a local radio interview when
asked about record-high gasoline prices. "We've let OPEC know that
we don't think well of these actions. The situation is a serious one."
During a round-table session with Small Business Administrator Hector
Barretto and about a dozen local business leaders later, Snow again
expressed concern about the oil cartel's reduced production.
"That couldn't come at a worse time," Snow said. "It's
an uncertainty for the economy."
OPEC members agreed to an output quota cut of one million barrels per
day from April 1 to blunt the effect of a seasonal downturn in demand
in the second quarter.
The U.S. Energy Department is forecasting record high summer gasoline
prices, some 20 cents above last year on average, due to strong consumer
demand and tight gasoline supplies caused by lower OPEC output quotas.
PRESSURE ON CONGRESS
The Treasury chief said rising energy costs ratcheted up pressure on
lawmakers to come up with a legislated method to increase domestic energy
production.
"We've got to get an energy bill. We're running out of options
here," Snow said of Bush administration proposals for a new energy
policy. These have stirred controversy because they would include more
drilling in environmentally sensitive areas in Alaska and elsewhere.
The energy price surge and OPEC's decision have blown into big issues
in the U.S. presidential campaign.
The Bush administration says it has contacted OPEC ministers to ensure
there is enough oil to keep the U.S. economy growing. However, Democratic
challenger Sen. John Kerry (news - web sites) says President Bush (news
- web sites) must take a tougher stand against OPEC.
In remarks prepared for a luncheon address to members of the local business
community, Snow said Bush's tax cuts had helped shift the economy onto
a faster trajectory that was significantly improving job prospects.
"Strength is apparent across the board, including strong job growth
in construction, retail and business services and economic growth is
likely to continue at a robust pace," Snow said of the labor market.
A 308,000-job surge in March employment let up some of the pressure
on the administration over the nearly two million jobs lost since Bush
took office in January 2001.
Snow contrasted the Bush prescription of tax cuts to spur job creation
with approaches such as those advocated by Kerry, proposals he implied
would impose a new burden on taxpayers.
"We have to choose between higher taxes and lower taxes,"
Snow said. "We have to choose between economic isolationism or
embracing the opportunity of the world's markets."
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