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Janet Ritz

Janet Ritz

Posted: May 4, 2008 04:23 PM

The Gas Tax 'Holiday' Shell Game

What's Your Reaction:

Senators Hillary Clinton and John McCain have challenged Senator Barack Obama over his refusal to support their proposal that would suspend the .18 Federal gas tax for three months this summer.

The problem?

A near-unanimous chorus of protests from experts, economists and environmentalists, all of whom support Senator Obama's position that the 'holiday' would net less than thirty cents a day for consumers -- if there is any net at all -- since, historically, oil companies have absorbed the savings without passing them on, while the loss of revenue from the tax would reduce the transportation infrastructure trust fund that is the source of income for thousands of American workers and the safety net for our highways and bridges that are currently crumbling.

Environmentalists have added that it would likely lead to more gasoline usage as at time when we need to reduce our carbon footprint due to the impact of climate change.

The 'expert' in support of Senators Clinton and McCain in this scenario so far?

Spokesman for the Clinton campaign and SHELL OIL LOBBYIST, Steve Elmendorf.

To which, Senator Obama responded:

"In a moment of candor, her advisers actually admitted that it wouldn't have much of an effect on gas prices. But, they said, it's a great political issue for Senator Clinton. So this is not about getting you through the summer, it's about getting elected," Obama argued. "This is what passes for leadership in Washington, phony ideas, calculated to win elections instead of actually solving problems."

The environmental organization, Friends of the Earth, has endorsed Senator Obama, citing the gas tax issue as false and lauding the Illinois Senator for standing up to political pressure to tell the truth about it. Newspapers across the country have also weighed in with their criticism, including this quote by one of Senator Clinton's own supporters:

"I was appalled by Hillary going with the gas tax," said Alice M. Rivlin, a budget director under former President Bill Clinton who supports Mrs. Clinton for the nomination. It "looked like pandering," Mrs. Rivlin said. An open letter signed recently by more than 100 economists said the proposed tax holiday would do little to reduce gas prices. In part, that is because a fall in prices would lead to more demand, which would cause prices to return to their earlier level. The result would be that overseas oil-producing governments would get money now flowing to the United States government in gas taxes.

What is also being lost in this pandering: the fact that this idea was first floated by John McCain and then picked up by Senator Clinton as a way to differentiate from Senator Obama.

It does differentiate. It was cited as the reason for the Friends of the Earth's endorsement and one of the tipping points that motivated super-delegate and former DNC Chairman, Joe Andrew, to change his allegiance from Senator Clinton to Senator Obama.

Andrew said the Obama campaign never asked him to switch his support. [...] He said Obama took the principled stand in opposing a summer gas tax holiday that both Clinton and McCain supported, even though it would have been easier politically to back it.

Nearly every expert, with the exception of a Shell Oil lobbyist, concurs: the 'Gas Tax Holiday' would be a windfall for the oil companies and offer the consumer little or nothing beyond a political advantage for Senators Clinton and McCain, which would be a win for politics as usual that, as usual, would provide next to nothing for the voter in the process.

It is a shell game.

More on this topic at THE ENVIRONMENTALIST

 

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