McCain, Clinton for Gas-Tax Holiday; Obama's Not
Posted on: Sunday, 27 April 2008, 09:00 CDT
For Hillary Clinton and Barack Obama, who have scant policy differences between them, tackling record gas prices is shaping up to be one of those disagreements -- and a potential pitfall for Obama.
Republican John McCain was the first out of the gate with a gas-tax holiday proposal to ease the pressure at the pump -- a plan to eliminate the 18.4-cents-a-gallon federal tax on gasoline between Memorial Day and Labor Day.
Clinton backs the idea, but Obama has come out of against a temporary gas-tax reprieve.
Obama had backed a similar temporary gas-tax freeze as an Illinois state senator in 2000. So Republicans are tagging Obama as a "flip-flopper," calling his current position "calculating and contradictory."
At a filling station in Indianapolis Friday, Obama said he opposed McCain's plan because it would leave a nearly $10-billion shortfall in the Highway Trust Fund. "You don't know that the oil companies are going to pass the savings on to the consumers, or if you'll just see an increase in prices by the same amount that the gas tax goes down," Obama said. "And it would deplete the Highway Trust Fund that we need for rebuilding our roads and our bridges."
"I don't want somebody to save 25 bucks -- that's what the savings would yield for the average driver -- and now they're potentially driving over an unsafe bridge," he said.
He's proposing instead long-term changes -- a windfall-profits tax on oil companies and "steps to reduce the price of oil and increase transparency in how prices are set."
Obama also rejects charges that he's switched positions since 2000, noting that he voted to keep in place the Illinois gas tax to preserve money for infrastructure repairs.
McCain economic adviser Carly Fiorina called the temporary tax break a "very effective way to give consumers a break when they need it most."
Clinton last week said on CNN that she would "consider a gas-tax holiday, if we could make up the lost revenues from the Highway Trust Fund." Yesterday she began airing ads in Indiana and North Carolina that said she would use windfall big oil profits to pay for it. She has slammed Obama for voting for an energy bill backed by the Bush White House, which she opposed, and for taking money from oil executives, even as Obama runs ads saying he doesn't take oil company donations.
But the gas-tax dispute injects a concrete dollar-and-cents issue into the campaign, just as voters are growing more anxious about gas prices.
The average car holds about 13 gallons, so lifting the gas tax would save consumers about $2.39 for every fill-up. But experts say it isn't clear how much drivers would save.
"I'm very much against lowering gas taxes. It raises the oil demand and that raises the world price," said Lee Schipper, an energy expert and a visiting scholar at the University of California, Berkeley.
Since 2000, at least half a dozen members of Congress have proposed suspending the federal gas tax, which supports infrastructure upkeep, but each time the measures have failed.
Such a tax suspension gained steam in New York on Friday, when seven Long Island assembly members announced an effort to eliminate the state's gas tax from Memorial Day through Labor Day.
All of the candidates have stressed the need for alternative fuels, like ethanol and biodiesel. Increasing fuel efficiency and encouraging conservation are also part of the candidates' plans to varying degrees.
One area of agreement for all the candidates is suspending the purchase of oil for the Strategic Petroleum Reserve. Experts say such a move would cut demand and help prices decrease.
Yet, with yesterday's national average price of regular gasoline at $3.591 a gallon, up from $2.901 a year ago, some experts say weaning consumers off gas-guzzling is the only way. In Nassau and Suffolk yesterday, regular gasoline averaged $3.791 a gallon, up from $3.025 a year ago, according to AAA.
"Before we talk about energy independence, we need to talk about energy discipline," said Tom Kloza, chief oil analyst at the Oil Price Information Service, an industry research firm. "It is political suicide to say that we need to set a national goal of using less gasoline or diesel, but it's much more reasonable given some of the other choices."
HILLARY CLINTON
--Supports a summer gas-tax holiday, paid for by oil companies' windfall profits, and suspending the purchase of oil for the Strategic Petroleum Reserve.
--Backs investing in clean energy sources and raising fuel efficiency standards.
JOHN MCCAIN
--Proposed legislation to eliminate the federal 18.4-cents-a-gallon gas tax between Memorial Day and Labor Day. Under his plan, $10 billion would be transferred from the General Fund to pay for it.
--Supports suspending the purchase of oil for Strategic Petroleum Reserve.
BARACK OBAMA
--Opposed to emporary gas tax holiday.
--Supports biodiesel and clean energy technology and raising fuel efficiency standards.
--Backs suspending the purchase of oil for Strategic Petroleum Reserve.
Source: Newsday, Melville, N.Y.
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