Why does Congress want to raise gas prices especially in the middle of a recession?
There is a bill in the U.S. House of Representatives entitled " H.R. 1905: Iran Threat Reducation Act of 2011" which continues the so far unsuccessful U.S. policy of using economic sanctions to change the Iranian government's behavior.
In Title III Section 301 of the bill, the president is required with very little constraints to expand U.S. sanctions to include the exportation of petroleum, oil or liquified natural gas. They would include shipping services, financing, brokering, underwriting or providing insurnace or reinsurance.
Economic sanctions, especially those aimed at goods and services used by the citizens of a particular state, are in and of themselves economic warfare and, to many, are seen as an act of war without a proper declaration by Congress. Historically, and pragmatically, they have mostly been useless in obtaining their stated goals, i.e. changing a particular state's behavior. In fact, they in many cases have the opposite effect of strengthening the particular regime and giving its people a rallying cry against the proponents of the sanctions.
H.R. 1905 not only is problematic, since it's economic warfare against citizens of a state the U.S. has not declared war against, but it also shows the lack of understanding of how global markets work.
The Wall Street Journal had an article last year that does a good job of explaining how global markets function in terms of oil and the negative effects patroleum sanctions would have on U.S. consumers and other allied countries. In the article, the authors state:
None of the current sanctions proposals in the United Nations or the U.S.—including the latest ones agreed to this week by the U.S., Russia and China—would target Iran's oil-export business, which generates about half of its government revenues. Doing so, experts say, likely would drive up the commodity's price world-wide and result in higher gasoline prices in the U.S., of as much as $1 more a gallon, even though the U.S. doesn't import any Iranian oil.
U.S. officials also fear that targeting Iranian crude could wreak havoc on the recession-ravaged economies of allies like Japan, which last year imported about 421,000 barrels of Iranian crude a day, just behind China and India.
Sanctions are problematic for many reasons, and it's obvious that one of the reasons probably most interesting to U.S. citizens is that these new proposed ones in H.R. 1905 could possibly raise gas prices at home by $1 – at a time when the U.S. economy is vacillating between recession and depression.