Video: Cheney worried by oil

updated 3/19/2005 1:40:06 AM ET 2005-03-19T06:40:06

Vice President Dick Cheney said Friday he is worried about record-high crude oil prices, now close to $60 a barrel, and the possibility of slower economic growth as a result.

In an exclusive interview on CNBC’s “Kudlow & Company” Friday, Cheney said that although White House economists see no immediate signs that growth is slowing, record-high oil prices are likely to have some impact on the U.S. economy.

“Obviously, $60 oil begins to bite,” Cheney said. “On the other hand, oil is much less important to our economy than it was 15 or 20 years ago … and when you allow for inflation, we have not got back to the highs we had back in the early '80s. So we think we’ll be able to weather this, but there’s no question that energy is a problem, and oil in particular.”

In the interview with economist Lawrence Kudlow, Cheney also discussed President Bush’s efforts to curtail domestic spending in his budget bill, the administration’s plans for private Social Security accounts, and drilling for oil in Alaska’s Arctic National Wildlife Refuge, which was approved by the Senate this week.

Cheney said Alaskan oil fields eventually should yield about a million barrels of oil a day — about 5 percent of the nation’s total consumption. He also said Arctic drilling could yield more oil than originally expected.

Technology is better today, Cheney said, so we’re getting more than the 20 or 30 percent from our oil fields that we saw in the past. “So we’ll get significant resources out of Alaska, as we should,” he said.

On the subject of the budget and deficit reduction, Cheney reiterated the White House’s position that the government should rein in spending. Cheney also restated Bush's warning that he would veto any highway bill that exceeds $283.9 billion. “If we get a highway bill that is higher than the 283 number, it will be vetoed,” he said.

Cheney said he expects to work with Democrats on the top item of Bush's domestic agenda: Social Security reform.

“I think that eventually there are going to be a number of Democrats that will be active participants in this process,” Cheney said. “I think the notion that they would turn their backs on this problem and say to the American people that there is not a problem, or we shouldn’t step forward to find out what the solution could be, I think that’s a loser for them.”

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