2008 On Hillary’s Gas-Tax “Holiday”
posted by April 30 at 9:59 AMon
Annie asked yesterday what I had to say about Hillary Clinton’s support for a so-called “gas tax holiday”—implying that my silence on the subject meant that I, as a Clinton supporter, was simply ignoring the proposal.
As I mentioned then, I’ve been swamped putting out the paper. But, Annie and Obama supporters shouldn’t take my silence (on this blog, at least) as tacit support for a gas-tax holiday.
As I said when McCain first proposed the “holiday,”
First, McCain says his proposal will reduce gas prices. The problem is, the federal gas tax isn’t why prices are so high (high enough that, for the first time in recent memory, people are starting to drive a little less); the reason gas prices are high is because the price of oil is $113 a barrel—a record level. The nationwide average price for a gallon of regular gas is $3.40 a gallon; cutting that price by 18 cents amounts to a five percent reduction. Put another way, the savings for a typical driver—one who drives about 12,000 miles a year—would be less than $28, or about half the price of a tank of gas. If that’s the tax cut that’s supposed to trickle down to ordinary Americans in the form of cheaper goods, food, and packaging, good luck even noticing it.
Not that McCain’s “trickle-down” thesis makes any sense in the first place. The “tax holiday” he’s talking about, after all, is only three months long. The economy is unlikely to respond to such a short-term reduction—especially if gas prices continue to increase. In fact, economists say that reducing prices actually stimulates consumption, triggering even higher prices. That “tax relief” isn’t going to be very comforting when you’re paying $4.00 a gallon.
Fortunately, that gas tax isn’t paying for anything important, right? Oh, just the Highway Trust Fund, which pays to fill potholes, fix crumbling roads and bridges, and patch up America’s failing highway infrastructure. Oh, yeah, and it’s running out of money already; currently, the trust fund faces a $2-$3 billion deficit. McCain says he’ll fill the gap by taking money out of the nation’s general fund. That’ll increase the deficit, but whatever—when you’re already $410 billion in the hole, what’s another $8 to $10 billion?
Now, Clinton’s gas-tax holiday scheme differs from McCain’s in a few respects: Unlike McCain, she would pay for the proposal by taxing windfall oil company profits and closing tax loopholes that benefit oil and gas companies. She wouldn’t dip into the Highway Trust Fund. And she addresses some of the actual reasons gas prices are at record highs: America’s refusal to dip into oil reserves, and OPEC’s stranglehold on oil production.
Regardless of those differences, Clinton’s plan to cut gas taxes temporarily suffers from the same flaws as McCain’s: It would provide only minimal “relief” and could lead to increased gas prices in the long (or even medium) term. Cutting gas taxes temporarily is no solution to increased fuel prices or to the economic woes of ordinary Americans.
OK. That said, there are huge differences between McCain and both the Democrats on energy issues; focusing on ONE dumb proposal by either of the Democratic candidates ignores the huge gulf in energy policy between both Clinton and Obama and McCain. It’s a “gotcha!” move that equates two policies that are very, very different and ignores all the occasions when Obama has made equally pandering moves.
Where were Obama supporters when he took tens of thousands of dollars from the Exelon (nuclear power) Corporation, and subsequently helped kill an amendment in Congress that would have spiked millions of dollars in loan guarantees for the company—loans that Taxpayers for Common Sense and Citizens Against Government Waste called “one of the worst provisions in this massive piece of legislation”?
Where were Obama supporters when he backed Joe Lieberman over Ned Lamont, contributing $4,200 to Lieberman’s campaign?
Where were Obama supporters when he pushed big subsidies (including the “Obama amendment,” offering oil companies a 50 percent tax credit for building gas stations offering the E85 ethanol blend) for corn ethanol production in Congress—calling corn ethanol “a clean, renewable, and domestically produced alternative fuel”? For that matter, where were they when he voted for 2005’s corporate-welfare energy bill?
Where were Obama supporters when he backed “clean” coal initiatives as part of the “clean energy revolution”?
Where were they when he enthusiastically picked up an endorsement from Big Coal’s biggest lobbyist?
I’m not saying you can judge a candidate by a single dumb position taken in isolation. Quite the opposite: By judging Clinton on one stupid, pandering policy point—the pointless, idiotic, probably harmful gas-tax holiday—Obama supporters ignore the huge gap between EITHER of the Democratic candidates and McCain on energy policy.
And if you don’t believe me, check out McCain’s speech on energy policy.