Recently, the three remaining candidates for president have been debating whether or not to have a federal gas tax holiday for the summer with John McCain and Hillary Clinton strongly supporting a measure that would suspend the 18.4 cent per gallon tax for the summer and Barack Obama opposing it.
There are a few problems with suspending the tax. First, it would cost the Treasury Department about $9 billion dollars, meaning transportation infrastructure will suffer because of the lack of revenue. In addition, 300,000 jobs would be lost because of that lack of revenue. Tell me again how this is helping the little guy? Furthermore, prices would actually be unlikely to go down with rising demand in the summer and the fact that when oil companies get tax breaks they rarely pass the savings on to the consumer and instead line their own pockets. Granted, Hillary’s plan would allow for a tax on big oil’s profits, but it is a measure she knows would have zero chance of getting passed in Congress. Congressional analysts have concluded that the best case scenario would allow for only a $30 savings over the summer for the average driver. A gas tax holiday would also likely lead to increased demand and thus a harsher environmental impact at a time when we are attempting to rein in our carbon emissions and dependency on oil.
What is clear here is that this is simply more political pandering by John McCain and Hillary Clinton to try to make middle and lower class voters that they are looking out for them whereas Barack Obama is an “elitist”. Johnathan Alter of Newsweek put it nicely,
Hillary Clinton has now joined John McCain in proposing the most irresponsible policy idea of the year—an idea that actually could aid the terrorists. What’s worse, both of them know that suspending the federal gas tax this summer is a terrible pander, and yet they’re pushing it anyway for crass political advantage.
Even the American Trucking Association, in light of recent protests by truckers over high gas prices, is against a gas tax holiday,
ATA appreciates the effort and supports the proposals. But we do have concerns that any fuel tax suspension proposal could damage the already ailing Highway Trust Fund. To the extent that McCain and Snowe’s proposals use general revenue funds to offset the hit to the trust fund, that concern is addressed. ATA did not ask for this legislation. And we believe it is only a very short term answer that does not do anything to address the longer term issue of rising fuel prices. ATA recognizes that rising fuel costs have a disproportionate impact on small trucking companies where even a small savings can be the difference in their staying in business.
When asked on Sunday’s ABC Town Hall program if she could name ONE economist who supported her propasal Clinton said,
I’m not going to put my lot in with economists.
Right. That’s like saying you can do brain surgery better than a brain surgeon.
Numerous economists have come out saying this is a bad idea, even those supporting Clinton. Bill Clinton’s former Secretary of Labor, now supporting Obama, phoned two of Hillary Clinton’s economic advisors who had this to say about her comment about not believing economists,
I reached two of them. One hadn’t heard her remark and said he couldn’t believe she’d say it. The other had heard it and shrugged it off as “politics as usual.”
Sen. Obama has been tough on the pair about this issue saying,
So this is not about getting you through the summer, it’s about getting elected. And this is what passes for leadership in Washington — phony ideas, calculated to win elections instead of actually solving problems.
It’s sick that the election has come to this; making proposals that they know are not going to do anything to solve the problem, but may be able to trick voters into thinking they are on their side. I hope voters in Indiana and North Carolina can open their eyes and see through this ploy.
Democrats Divided Over Gas Tax Break – [New York Times]
Political Pandering – [Newsweek]
Expert Support For Gas Tax Holiday Appears Nonexistent – [Huff Post]
Clinton Gas Tax Holiday: Hillary Attacks Economists – [Huff Post]
Obama calls gas tax relief a political ploy, as Clinton stands by her proposal – [LA Times]