Friday, April 28, 2006
Senate Republicans Believe Bloating Is Answer To Gas Pain
A few days ago, Senator Robert Menendez suggested a plan to ease gas prices - eliminate the federal gas tax charged at the pump for each gallon of gas. The current Federal gas tax is 18.4 cents per gallon, and as such, prices would drop by that amount for the 60-day period.
Will this fix the current problem Americans are facing at the gas stations across America? Absolutely not. Will it help? Yes. Especially if the Federal gas tax revenue that is lost would be replaced by a repeal of tax cuts currently given to big oil companies.
Senate Republicans countered with what has to be one of the craziest, most expensive, and most ridiculous plans ever - offer a $100 rebate check to all taxpayers who earn $150,000 or less as a couple, or $100,000 for individual taxpayers. Cost of this plan? TEN BILLION DOLLARS.
My great aunt who's 95 and hasn't driven in fifteen years? SHE gets a check, courtesy of the Republicans. My good friend who lives in New York City and hasn't owned a car in several years? HE gets a check, courtesy of the Republicans. What about my aunt, who has epilepsy and can't drive as a result? SHE gets a check, courtesy of the Republicans.
Oh... one little point that they're not saying quite as loudly - in exchange for the check, Republicans finally get to destroy the Arctic National Wildlife Refuge.
Are you friggin' kidding me?!? This plan is utterly ludicrous, and boils down to nothing more than a cheap attempt to hand out checks in exchange for votes for Republicans in the fall.
Don't believe me? Well, look at it from this angle, then. Senator Debbie Stabenow proposed a plan whereby five billion dollars in tax breaks given to oil companies would be repealed and the money would be distributed to the families in the form of $500 checks - the estimated additional burden that families would feel as a result of higher energy costs. The Republican response to Stabenow's plan was to rule it out of order.
And yet, shortly afterwards, Senator Bill Frist announced the Republican plan to hand out checks to everyone.
Let me be clear, here - I don't agree with handing out checks courtesy of Sen. Stabenow OR Senator Frist. Neither solves the problem at hand. As far as drilling in ANWR, I wish we could simply re-frame the discussion in this way - let's stop talking about "reducing our dependence on foreign oil" and START talking about reducing our dependence on OIL... PERIOD. ANWR's oil supply is limited and only delays the inevitable choices that have to made already. Better to make those decisions now instead of simply delaying.
But there needs to be price relief in the meantime, correct?
Fine. The main target should be looking very closely at the oil companies themselves, but I'll save that for another post.
Let's go back to Senator Menendez's proposal - eliminate the Federal gas tax for 60 days. I would add that the loss of revenue should be made up by repealing tax breaks given to oil companies in the last Highway and Transportation Bill.
An average American car's gas tank holds 20 gallons of gas. A typical American commuter fills their tank three times a week. Over a sixty-day period, this would work out to about 480 gallons of gas in the 60 day period. Removing the Federal gas tax - 18.4 cents per gallon, would equal a savings of about $88.32 for the average American driver.
Democrats are WRONGLY labeled at tax-and-spend (Republicans are now much more correctly being labeled as "Credit Card Republicans," as they cut taxes, but spend infinitely more than Democrats could ever think of spending), but look at this plan. It costs less than the Republican tax rebate of $100, and is targeted directly to those who purchase gasoline. Those who purchase more (for industrial and agricultural purposes) would receive more of a break than the typical consumer, but all would receive relief in equal proportion.
Any Republican who EVER wore the label of "fiscal conservative" HAS to be opposed to this plan, which simply means more trouble for the White House, as well as for Congressional Republicans.
All I can say is, thank God for my Prius.
Tags: gas prices, $100 tax rebate, Republicans, ANWR, Arctic drilling, Menendez, Stabenow, Frist, Federal gas tax, foreign oil, energy independence
Posted by FleshPresser at 6:08 PM /
The Professor posted at 7:08 PM
Hmmm... so let's look at a few things.
First, the actual percentage of family income being spent now on gas (3%) is lower than in 1981 (5%), according the the Wall Street Journal today, and in fact, "The price of a gallon of regular gas averaged $2.74 in April, according to the Energy Information Administration. Adjusted for inflation, that was still 14% below the peak in March 1981, when, in today's dollars, gasoline averaged $3.18."
So. while this price is higher than last year's price, it is not near historic highs, and in fact, has not resulted in significant changes in consumer behavior. Actually, interviews with consumers seem to indicate it would take a much larger hike in the price per gallon to convince consumers to change their behavior. (http://online.wsj.com/article/SB114644818224940150.html?mod=home_whats_news_us)
Now, on to point two. Apparently, the assumption is made that oil companies should not be given tax breaks, and should not be "allowed" to earn profits. Actually, this seems to ignore the reason for the high costs of gasoline right now. The problem isn't the cost of pulling the oil out of the ground--it's the limitations on the number and capacity of the refineries. Removing tax incentives for oil companies that provide incentives for them to increase capacity at existing refineries only encourages them to leave production capacity "where it is."
So here's the question: What is your solution to the long term problem of lack of refining capacity? Would you welcome a new refinery in your neighborhood, if it meant that the nation had a price decrease of 10 cents per gallon?
FleshPresser posted at 12:34 PM
First of all, let me say that I appreciate someone with an opposing viewpoint coming to READ PTF in the first place, and then bringing intelligent and substantiated debate to the table.. I think that's what our Representatives should be doing more of in Washington, and more Americans should be doing with one another.
That being said, we've had portions of this debate in other posts here... I won't belabor the points already made. Suffice to say that I am not opposed to ANY American company being "allowed to make profits" as you characterize me.
I AM, however, deeply opposed to the notion that you and I put BILLIONS of additional dollars in the pockets of the oil companies, via our Members of Congress authorizing the additional revenue to the oil companies in the latest Highway and Transportation Appropriations, at a time when the oil companies are charting all-time record profits.
The Republican response to give people a $100 check is ludicrous, and surely you, as a reasoned and intellectual type, can see that this obviously does not solve the problem. This notion, however, comes from the same party who brought you tax incentives for Americans purchasing SUVs - the larger the automobile, the larger the deduction.
As a thoughtful individual, surely you must also note that drilling in ANWR does NOT solve the problem, either. Depending on how much oil is found there, it puts a band-aid on the situation, and keeps us addicted to an energy source with a finite supply.
Even if I said "yes" to placing a refinery in my backyard tomorrow, you and I both know that this is not the answer, either. It's a long-term solution to a problem which again only serves to keep us mired in the same long-term problem.
What would I suggest, then?
(Never let it be said that FleshPresser, as a member of the "Democratic" party, would come to the table with problems, but no solutions.)
First, in the short-term, I think I already mentioned that I supported a repeal of the Federal gas tax, with the revenue being made up via a repeal of the tax credits that were given to the oil companies.
(As an aisde, language is so funny. Oil companies in hearing this possibility, have lobbied hard against a "tax increase"... I suppose you could technically call it an increase, although it would more rightly be labeled a restoration of the taxes to the original base.)
I would support no legislation which would "criminalize" owners of SUVs or larger automobiles... they're being punished at the pumps as it is.
I WOULD, however, support immediate and DEEP tax credits on both the state and federal levels to incetivize the purchase of hybrid and other gas-efficient automobiles. The less gas being used, the less demand there is, and the lower the price drops.
I would urge the President to come out and recommend a "system of conservation" to the American public. Not simply giving lip service to the notion by uttering the single word. It has been noted that if Americans would use just %3 less gasoline, the price would drop sharply. The President, were he a TRUE leader, would come out and outline ways in which Americans should be working to that end. That would mean less profit for the oil companies, however, and as such, Bush would never do that.
What do I support in the long-term? I think I mentioned it already in my initial post - I believe we need to stop talking about our "dependence on FOREIGN OIL" and begin to address our dependence on OIL... period.
Immediate steps should be taken to further enhance hybrid technology, as well as an immediate focus on other renewable energy sources.
People say that it will take too long to develop these renewable energy sources. To that I would reply that we set a goal of reaching the moon in a decade...something that seemed outrageous at the time. We accomplished that goal.
We, as Americans, can accomplish ANY goal if it becomes a high enough priority.
What has become clear is that the current Administration and the Republican-led Congress has not placed this as a priority, and will suffer the consequences in 2006 and 2008.
FleshPresser posted at 1:11 PM
Although I just lost my seond post in reposnse here, let me try to summarize it as briefly as I can.
Your facts about inflation adjusted highs and consumers are both wrong, as well.
Inflation-adjusted prices are near their all-time high right now, and are expected to climb even higher throughout the summer.
In addition, there have been several polls (which I will cite in a separate post - again, Blogger ate my homework the first-time around, unfortunately) showing that a LARGE majority of Americans are affected by these prices, are changing their plans, and are hurting - all of which will have a ripple effect through all sectors of the economy.
You you can believe your sources, and I'll believe mine - but I'll entertain wagers on which sources the American public will believe come November.
The Professor posted at 1:29 PM
Actually, I appreciate your responses, however I would argue (along with the WSJ) that Americans are voicing their opinions, by actually not significantly curbing their consumption of gasoline.
In another blog's comment section, (see: http://thelobbyists.blogspot.com/2006/05/europe-kicking-our-ass-on.html) I also outlined a series of articles in WSJ and Wired, citing, Consumer Reports, that essentially gets to the conclusion that, your prius excepted, hybrids aren't saving gasoline. Heart in the right place, but dollars still flying outa the wallet at the pumps.