Gas tax holiday: McCain, Hillary support it, Obama changes his mind (Video added)

posted at 8:50 am on April 24, 2008 by Ed Morrissey

John McCain wants to give consumers a break this summer by suspending the federal gas tax. Hillary Clinton says she supports that plan. Barack Obama, despite having supported a similar tax “holiday” in Illinois, now says he’ll oppose it. Apparently, gas prices haven’t gone high enough, even though they were less than half of today’s price in 2000 when he supported it:

In a new policy split in the presidential campaign, Barack Obama opposed a federal gas-tax holiday supported by John McCain, the likely Republican nominee. Hillary Clinton said she would be open to the tax break.

Sen. Obama, who voted for a temporary gas-tax break when he was a state senator in Illinois, rejected a federal tax holiday as bad fiscal policy. The federal gas tax raises money to repair and expand the highway system.

In Illinois in 2000, Sen. Obama voted for a six-month, five-percentage point break on the state’s 6.25% gas sales tax. The reduction of the tax, which goes into a general revenue fund, passed on a 55-1 vote and included measures designed to ensure that the benefits of the tax break reached consumers. At one point, Sen. Obama jokingly asked on the Senate floor whether it would be possible to install placards on gas-station pumps telling motorists he had helped win temporary price relief.

When some state legislators tried to make the suspension permanent before it expired, Sen. Obama spoke out against that measure but defended his vote for the holiday, according to transcripts posted on the legislature’s Web site.

“I originally voted for the suspension because I thought that it was extraordinary circumstances, given the huge hike in prices,” he said at the time. Gas prices averaged $1.52 a gallon in March 2000.

Hey, if we put up placards at the pump that give Obama the credit, will he vote for it this time? And could he come up with a more foolish explanation of his opposition? Did he and his campaign think that no one would go back and check the 2000 price to see how it compares to 2008?

Actually, a good case could be made for opposition to the gas tax holiday, but it won’t come from Barack Obama. The removal of the tax for three months only temporarily addresses high gas prices, and in the least effective manner. It would give a short modicum of relief but would do nothing to reduce the pressures that drive gas prices higher. Instead of declaring tax “holidays”, Congress took take some or all of the following actions:

  • End state fuel-mixture mandates — Our refineries have to produce upwards of 30 different formulations of gasoline for different states. It makes our supply chain brittle when it should be flexible and leaves us vulnerable to sudden price hikes when refineries have problems.
  • Begin expediting the approval process for more refineries — We have not built a new refinery in the US for 30 years. We keep expanding the capacity at existing refineries instead, and that also leaves the supply chain vulnerable to disruption when a refinery has to shut down. They now have to run at full capacity constantly in order to meet demand and keep prices down. Over the last two decades, we also now have to import more and more refined gasoline instead of crude to keep up with the demand, thanks in part to a lack of refinery capacity here in the US.
  • Allow more domestic drilling — Oil, like any commodity, increases in price when demand goes up and supply doesn’t meet it. With China and India vastly increasing their demand, prices have gone up accordingly. The only way to get the prices down is to either reduce demand or increase supply. That means the US has to start using its own resources rather than living off the resources of others.

Congress has dithered on all of these issues for years, and had Washington taken the appropriate action — say in 2000 or so — we would already have seen the benefits from it. The tax holiday would at least give a little temporary relief, but until someone addresses the root causes of high gas prices, holidays from reality won’t solve them.

Update: It doesn’t add much to the above, but here’s a YouTube mashup that highlights the Obama change of heart:

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Comment pages: 1 2

To paraphrase Daniel Day-Lewis, “There’s a whole ocean of oil under our feet, and nobody can get at it…PERIOD”

I cannot for the life of me see one good reason for our country’s failure to produce a new oil refinery at any time during the last 32 years. Nothing threatens our country’s safety and prominence more than a looming energy crisis, and skyrocketing fuel costs and shortages. If you ask me, every single politician who stands in the way of building new refining capacity in this country AND allowing encouraging drilling in both ANWR and the Bakken Oil Formation should be tried and hanged for treason. I’m not joking. And as it should always be, failure to step up and introduce the motion and provide leadership should be tantamount to obstruction. We should start the trials with Hagel, and continue down the line until somebody gets the point.
steadyrock on April 24, 2008 at 4:13 PM

I could not agree more. I live in Palm Springs, CA. Gasoline is now $4.15 a gallon and in Death Valley, a friend sent me picture of a gas station, selling Gasoline for $5.45 a Gallon.

People can debate all they want, this energy crisis is because of Congress obstructing and manipulating energy policy. I lived through the last major engineered gas crisis back in the 1970’s and had to sit in line for hours to get my car filled up.

Back in 1976, Arco discovered the largest oil reserves in the world at Gull Island and 3 other fields on the North Slope but the US Department of Energy ordered the wells capped.

Arco also discovered huge natural gas fields that have been ordered by the US Government to be pumped back into the ground. Our own Government has stopped production on the Alaskan North slope and has created this so called Energy Crisis.

Here is a quote I saved from 1976; Atlantic Richfield pipeline executive: “In my estimation, from the seismographic work and the drillings we have already done, I am convinced that there is as much oil under the North Slope of Alaska as there is in all of Saudi Arabia.” “When these wells are brought on line, America will finally be energy independent”.

These are the fields; Prudhoe, Kuparuk (Twice the size of Prudhoe), Gull Island and Pay Zone Oil. This is not the ANWR discovery or the Prudhoe Bay fields.

Gull Island was capped, then a year later, Congress declared Gull Island a nature preserve for the sea gull. The last time I checked, the sea gull is not an endangered species.

I checked this story out and the permits were pulled back in 1976, do a google at the Alaskan Department of Energy.

We are being lied to and our economy is being destroyed in the name of man made Global Warming and Conservation.

Steadyrock is right when he says these people need to be tried for treason. America is sitting on the largest known oil reserves in the world yet we are importing oil and capping wells. This situation just may result in another great depression.

What kind of insanity allows our own Congress to destroy our economy and our way of life for some unknown environmental agenda.

The ethanol mandates that GWB recently signed into law are resulting in Global Food shortages and famine in some third world countries. Because of the ethanol fuel mandates alone, Food prices have increased by 37% last year because the price of corn that is used to make ethanol has tripled in price.

The old hogwash about getting “energy independent” and helping corn farmers keeps building votes- pushed by an aggressive phalanx of paid association liars and bought politicians. . . . The corn gluten angle and even the fact that ethanol reduces engine life and delivers lower gas mileage than conventional unleaded seems a tad too complicated for Congress to pick up on.

ScottyDog on April 25, 2008 at 10:58 AM

Wouldn’t it be great if we could put in place, and more importantly elect, candidates that promise to:

1. Stop all this crap about bears, eagles, and man-made global warming and instead open up ANWAR and the gulf to oil exploration and production.

2. Stop looking at ways to grab more power through peddling of social do-gooder legislation and look for ways to increase the freedoms we were promised by the Constitution.

I’d vote for this type of candidate in a heartbeat, Republican, Democrat or Libertarian!!!

Golfer_75093 on April 25, 2008 at 11:22 AM

Well one problem could be that reducing prices with a tax break could ramp up demand, possibly pushing prices higher.

Then when the tax returns, things could be worse. Highlighting tax issues and putting Obama in the uncomfortable position of talking about issues he clearly knows nothing about is politically worth potential risks.

Faith in the American people is always a good defense. for McCain.

Agrippa2k on April 25, 2008 at 11:37 AM

ScottyDog on April 25, 2008 at 10:58 AM

Scotty as much as it hurts me to say this, since you and I are on the same page. Dept of Energy for Alaska do not have those files. Nor does the A.O.G.C.C. you will have to ask the USGS or BLM, who have those files in Confidential Indefinate.

I know because I asked for some of the special files way back when. When they said they would not release them I asked why. The reasoning was because even if there is a “Discovery Well” and it has been released to the public for their own knowledge, the files will forever be unattainable via the BLM rules and regulation. It is the Federal Governments way of always keeping confidential information that is of public use.

A.O.G.C.C. holds almost all the records for any and all wells and files, including mud logs, resistivity, gamma.. etc. They only have a few that are concidered Confidential Indefinate due to laws the State of Alaska provide for the Oil caompanies. But those Wells eventually become public.

I do not understand why BLM is like that. USGS is not like that anymore and I have actually been in their “storage room” to look over old well history files for the Cook Inlet and a few other wells or fields like Katalla, which is under BLM but no records are found.

Ticks me off to no degree!

upinak on April 25, 2008 at 11:46 AM

I always hear the argument that our country hasn’t built a new refinery for about 32 years. This is true but misleading. Existing refineries have been expanded but it is rare you hear about this.
Around March 31st of this year the House Select Committee for Energy Independence and Global Warming held hearings questioning executives from major oil producers and marketers. Each exective indicated the pricing run up is primarily due to speculators, crude oil supply and taxes. The largest cost of gasoline is from crude prices and taxes. The US currently has the refining capacity. What is needed is greater access to crude oil supply. ie, offshore, ANWR, & oilshale. (Committee chaiman Chairman Edward Markey (D-MA)convienently ignores this)

diogenes on April 25, 2008 at 11:57 AM

LMFAO good Lord people come in all shapes and sizes of stupid!

upinak on April 24, 2008 at 11:30 PM

Yeap made some serious money today on my stupidity. If being this stupid makes you this amount of money in a day I’m glad all you “smart” people continue to work and wonder why things are the way they are and bitch and moan about things they don’t understand. Got to love that Potash company. Moved $13.00 today. I wonder why it moved $13.00 maybe I was just “stupid” lucky to know it was going to move up in price today. It had nothing to do with supply, demand of the stock, of the fertilizer, of the recent selloff of the stock, its earnings, its projections, it’s chart formation, its relative strength, the rest of the market, the strength of the dollar, the price of oil, the price of soft commodities. Nope it was just stupid lucky I guess.

unseen on April 25, 2008 at 5:38 PM

explain again why the refiners are producing at 80% of present capacity when gasoline is at all time highs?

unseen on April 24, 2008 at 5:21 PM

Your premise is flat-out WRONG!! The only way you can get a number like “80% capacity” is if you count all of the refinery capacity which is out of service for planned and unplanned maintenance. Any US refinery which ran as little as 80% when the equipment was working would have its management forcibly removed and replaced by the corporate owners and/or the stockholders within a single quarter.

Refinery parts wear out…sometimes taking out other large pieces of the plant. The government demands way too many different refined products seasonally: each of which requires a shutdown, purge, and restart (planned maintenance) …thus reducing overall refining capacity.

But nobody makes money by deliberately idling a refinery: that is just wacky left-wing conspiracy lunacy!!

Grab a copy of the annual report of Valero or any one of the other major refiners off the web to see how badly they want every facility utilized to its maximum, what extreme measures they put in place to assure a continuous oil supply, and read the actual data for yourself.

landlines on April 25, 2008 at 6:44 PM

landlines on April 25, 2008 at 6:44 PM

the numbers are not made up. they are reported every wed at 10:30am. Last week capacity was at 81% this week at 85%. This during the time of year refiners are ramping up production for the summer driving season and during record high gas prices. they are not doing it this year because the “crack spread” is not there. I.e they make no money or very little money on gasoline when oil is shooting upward. gasoline margins come in when oil price is stable or downward sloping. it is not in their interest to supply more gasoline then is needed. Add into the mix that gasoline demand is slowing because of the economy and refiners are producig less gasoline because that is economics. It is not a conspiracy theory. It is economics. refiners shares are close to 52 week lows because they can’t make money on gasoline. what better time to plan “repair” work then when it benefits your company to decrease the supply of your product. If you think the refiners and the consumer have the same objectives you are mistaken. Of course the refiners what to ensure needed supply to the country. But they do not want to ensure plentiful supply during a time of declining margins, lower demand, and rising costs. Any CEO that did that would be fired.

unseen on April 25, 2008 at 10:46 PM

Comment pages: 1 2