Bush says no magic wand to lower fuel prices

By Jeremy Pelofsky and Chris Baltimore

WASHINGTON (Reuters) - U.S. President George W. Bush said on Tuesday there was no "magic wand" to bring down record-high fuel prices but would consider a proposal to suspend federal gasoline taxes this summer -- an idea that has divided the 2008 presidential candidates.

Trying to calm anxious Americans facing $3.60 a gallon gasoline and soaring grocery bills, Bush again prodded Congress to open an Alaska wildlife refuge to oil drilling and allow construction of more nuclear and coal plants.

"I firmly believe that, you know, if there was a magic wand to wave, I'd be waving it, of course," he said during a news conference. "I've repeatedly submitted proposals to help address these problems, yet time after time Congress chose to block them."

Crude oil prices have surged more than five-fold since 2002, heaping more pressure on a waning U.S. economy besieged by dropping home values and rising food prices.

Oil prices are up nearly 25 percent since the start of 2008, logging a record near $119.93 a barrel on Monday, and gasoline prices are above the key $4 a gallon mark in some U.S. cities like San Francisco.

Giant U.S. oil company Exxon Mobil Corp will report its quarterly profits this week, after ConocoPhillips, Royal Dutch Shell and BP all reported quarterly profit increases from a year ago.

Presumed Republican presidential nominee Sen. John McCain and Democratic rival Hillary Clinton have both endorsed suspending an 18.4 cent per gallon federal gasoline tax this summer, but fellow Democratic hopeful Barack Obama has argued that it would make little difference.

Clinton, a New York senator and former first lady, has used the gas tax issue to differentiate herself from Obama, an Illinois senator, as they fight ahead of the nominating contests in Indiana and North Carolina next week.

In Indiana, Clinton argued McCain's plan for the gasoline tax holiday did not cover the costs to the federal government and said she would do that by taxing oil company profits.

"That money would then go in to replenish the highway trust fund," she said.

The McCain campaign disputed her charge, saying his legislation now pending in Congress would cover the money for the trust fund via general revenue.

Obama said the tax holiday plan would only save drivers a total of $25-$30 and may not reduce prices.

"This isn't an idea designed to get you through the summer, it's an idea designed to get them through an election," he told a town hall-style meeting in Winston-Salem, North Carolina.

Bush said he was willing to consider suspending gasoline taxes.

"We'll let the candidates argue out their ideas," Bush said. "If it's a good idea, we embrace it. If not, we're analyzing the different ideas coming forward."