Network News

X My Profile
View More Activity
Posted at 6:00 AM ET, 05/ 6/2008

Gas Tax Wars

By Michael Dobbs

The gasoline wars between Hillary Clinton and Barack Obama have been heating up to coincide with the Indiana and North Carolina primaries. The airwaves are full of charges and counter-charges over Clinton's plan for a three month gas holiday between Memorial Day and Labor Day. Obama says the idea is simply an election day "gimmick"; Clinton claims her plan will save hard-working American families $8 billion a year. An examination of the fine print in the latest round of TV ads shows that both sides have been stretching the facts.

The Facts

Let's begin with the Clinton TV ad airing in Indiana which you can see above. After complaints from motorists about spiraling gas prices, an announcer claims that Hillary's gas tax holiday would "save families $8 billion." He then adds derisively: "Barack Obama says that's just pennies."

According to the Bureau of Economic Statistics, total annual revenues from the federal gasoline tax came to $26 billion in 2006. Since consumption is usually higher in the summer months, it is possible that revenues for the period between Memorial Day and Labor Day might amount to $8 billion. Suspending the gasoline tax does not mean that this money will end up back in the pockets of consumers, however.

As I explained last week, most economists believe that only a portion of the 18.4 cents a gallon federal gasoline tax would revert to consumers in the event of a tax holiday. Prices are set by a combination of supply and demand. A gas tax holiday would boost demand, which would lead automatically to higher prices, eliminating much of the benefit to consumers of the tax moratorium. According to a study by Jeffrey Perloff of UC-Berkeley, the net benefit to consumers would be between 9 and 12 cents per gallon. Some other economists say the benefit would be even less.

The average American family of four consumes 2000 gallons of gasoline a year, or 5.4 gallons a day. According to the Perloff study, Clinton's proposal would save such a family between 48 and 64 cents a day. This figure is comparable with the estimate of 30 cents per day per driver that Obama used on the Tim Russert's "Meet the Press" show on NBC on Sunday.

The Clinton TV ad is contrasting a grossly inflated estimate for the savings to all American families ($8 billion) to Obama's claim that each driver will only save 30 cents per day on average. That's not even an apples-to-oranges comparison. The Clinton camp is comparing an entire apple orchard with an individual apple, which is a flawed and rather dishonest way of conducting an argument.

Now take a look at this Obama ad that has been running in Indiana, slamming Hillary's "bogus tax cut" plan.

The Obama ad quotes from a Paul Krugman column in the New York Times on April 28 to support the claim that Clinton's tax holiday will merely "boost the profits" of the oil company. The trouble is, Krugman was not attacking the Clinton plan in his column, he was critiquing a proposal by Republican candidate John McCain. While the two plans have a lot in common, they are different in one respect: Clinton has also called for a tax on the windfall profits of oil companies.

Krugman has criticized the Clinton plan on his blog. But the Princeton economist did not address the Clinton gas tax proposal in his newspaper column. The Obama camp is wrong to imply that he did.

The Obama campaign is using a different version of the ad in North Carolina, replacing the quote from Krugman with a quote from Governor Mike Easley, a Hillary supporter. Take a look.

The Pinocchio Test

Neither Democratic candidate comes out of this dispute particularly well. The Obama campaign has misquoted the New York Times. The Clinton campaign is inflating the benefits of the New York senator's proposed gas tax holiday, and using a ridiculous comparison to attack Obama.

<

(About our rating scale.)

By Michael Dobbs  | May 6, 2008; 6:00 AM ET
Categories:  2 Pinocchios, Barack Obama, Candidate Watch, Economy  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Wright's Wild Charges
Next: A Geppetto for Bill Clinton

Comments

This one of those kissing your sister commentaries. By nature it can't be a draw because either you believe one candidate or the other.
And the question is! Is there going to be a gas tax holiday this summer.
Who believes that there will be? Probably no one.
Your approach to this issue is wimpy. If you're not pissing somebody off you're not doing a good job.
Sorry!!!

Posted by: vincentcsmith | May 6, 2008 6:49 AM | Report abuse

Even if the gas tax holiday money did partly end up in voters' pockets, how can any voter be dumb enough to fall for a measure that only lasts until the election?

It's no different from those credit cards with "low introductory interest" that rockets after three or six months.

How stupid do they think people are? And worse, are they right?

Posted by: OD | May 6, 2008 7:21 AM | Report abuse

Why are you even discussing what is a fantasy anyway. A proposal that can never happen, will never happen and they know it before even proposing it. You can promise anything when you know it won't even happen. Next step is to try to blame someone for this fairy-tail not happening and make it look like it is their fault it didn't happen like she did in NY when she didn't make good on her promises campaigning for senator. She blamed everything on Al Gore not winning the election. It was the same B**L S**t. She is a F**Kin joke and anyone stupid enough to vote for her deserves what they get.

Posted by: Anonymous | May 6, 2008 7:32 AM | Report abuse

1)If Hillary and McCain are really serious about a gas tax vacation why aren't they proposing it in the Senate instead of just talking about it?

2)Even if someone else finally proposes it all three candidates won't show up to vote. When is the last time that any of them have actually done their current jobs?

3) Regardless of how great they think a gas tax break would be it will do nothing for them in November as the tax holiday will be over

4) Some of their colleagues are working on real changes that will have an immediate and long term impact, rather than just talking about fluff...

...on the regulation of the crude speculation bubble-

"Sen. Dianne Feinstein (D., Calif.), one of the chief proponents of the provision, said it puts all significant energy trades on electronic platforms within the regulatory confines of the Commodity Futures Trading Commission, and will impose limits on the size of traders' positions to prevent excessive speculation.

"A major step has been taken toward closing the Enron loophole once and for all," Sen. Feinstein said, referring to how the legislation takes aim at the law that allowed the manipulative trading that led to the failure of energy titan Enron Corp." - WSJ

Posted by: Southeasterner | May 6, 2008 8:02 AM | Report abuse

Sorry, Hillary's inflated numbers, even if they were true (as true as her Bosnian sniper fire adventure), would give Americans another tank or two of gasoline. And the real savings in this is where? Obama's right! The Hillary-McCain idea is nothing more than pandering to the masses.

Posted by: Black and Bitter Like Coffee | May 6, 2008 8:51 AM | Report abuse

But the worst part about all of this is that, regardless of the truth that the gas tax holiday (a) won't become reality because it has not nor will it be proposed in Congress and (b) is a stupid idea, economically, because increased demand will wipe out any cost savings, people will still vote for Clinton merely for bringing up the issue even is she is doing nothing to actually promote it. Am I elitist for realizing the distinction between a go-nowhere gimmick and reality?

Posted by: alterego1 | May 6, 2008 8:59 AM | Report abuse

Leichtman, where are you to explain how economics really works, and how this will be saving us all $70 this summer?

Posted by: alterego1 | May 6, 2008 9:03 AM | Report abuse

Is Obama misquoting the NYT? Not really.

The fact that it appears in Krugman's blog and not his column is nitpicking, both are equally available on the NYT web site, and both represent Krugman's judgment.

Krugman, who strongly supports Clinton in both his column and blog, has the honesty to say that Barack Obama, "to his credit, opposes John McCain's really bad idea on gasoline, which Hillary Clinton is emulating (but with a twist that makes her plan pointless rather than evil.)"

Well, pointless rather than evil is still pandering.

And if we factor pandering into the health care debate, will Hillary, if elected, really look after the little guy? Her previous attempt at health care reform, early in her husband's first term as president, was more concerned about insurance company profits than reducing the American consumer's cost for health insurance.

Posted by: tokugawa | May 6, 2008 9:08 AM | Report abuse

This is fact-checking? Averaging vehicular homicide and jaywalking and declaring that what really happened was driving without a license? If one side is 80% in the right and the other side 20% so, the fact checker would have us believe that both are 50% right. Split-the-difference journalism is lazy, dishonest and a great disservice to the reading public.

Posted by: R M Gopal | May 6, 2008 9:09 AM | Report abuse

A couple of Pinocchios to the Fact Checker for equating the misrepresentation of an issue peoples' lives with one effecting their reading glasses.

Posted by: Anonymous | May 6, 2008 9:14 AM | Report abuse


From "Head of State"
http://headofstate.blogspot.com/2008/05/gas-tax-holiday-multiple-choice.html

"Tuesday, May 06, 2008
Gas Tax Holiday: Multiple Choice

Hillary Clinton's claim that a Gas Tax Holiday will help middle class Americans, at the same time that her advisers have privately stated the opposite to the Washington Post, namely that they are aware that this will result in an increase in gas prices, and that it is "just politics", is most similar in political mindset and ideology to:

a) Former Bush Administration Chief of Staff Andy Card stating that the Administration waited until September to make its case for Iraq because `From a marketing point of view, you don't introduce new products in August';

b) Paul Wolfowitz predicting that the costs of reconstruction in Iraq would be paid for by oil profits from that nation, when contemporaneous predictions of the costs of the war and a subsequent insurgency would be, and have been, far greater;

c) Dick Cheney's prediction we would be greeted in Iraq as "liberators, despite numerous pre-war intelligence analyses which warned "that the U.S. would face armed resistance from Iraqis following the fall of Saddam Hussein's regime."

d) All of the above

Cite:
Head of State
http://headofstate.blogspot.com/2008/05/gas-tax-holiday-multiple-choice.html

Posted by: Anonymous | May 6, 2008 9:14 AM | Report abuse

Please, Washington, no more smokescreens!

Posted by: Anonymous | May 6, 2008 9:39 AM | Report abuse

I really appreciated your column when it started but I'm afraid it's gone downhill. You seem afraid to side with all the economists, businesspeople, newspapers, and others who have called the Clinton gas tax holiday a bad and dishonest idea. You don't even mention Bloomberg calling this "the dumbest idea" he had heard or the letter from 230 economists released yesterday condemning it. Instead, you have trumped up one misquotation from Obama to create a false sense of "balance" on the issue.

Also, you need to find a better economist. I took economics in college years ago, but I had a good teacher and his lessons have stuck.

Supply and demand do set prices, just as you said. So the price at the pump right now (which includes the gas tax) has been set by the market. If you strip off the gas tax, the price will go right back up to the same level right away, with no savings, because we've already determined that total price is what the market will bear right now. It's not due to any one player, but to impersonal market forces.

The concern you mention is that while the price is readjusting to market level, it might be temporarily depressed, which would make things even worse by making demand shoot up. Then the new higher price would be locked in, only to create a short-term double whammy when the tax returns after the tax holiday.

Of course this is all in the fantasy world where it is actually dropped this summer. Part of Clinton's dishonesty here is that we all know it will not be.

I don't mind the kind of pandering that involves knocking back a shot or changing your accent every state, but when Clinton cynically proposes something that looks like it will help desperate working people, but won't actually happen and wouldn't help them if it did, your analysis should be all about her and it should be four Pinocchios.

Posted by: Fairfax Voter | May 6, 2008 9:41 AM | Report abuse

I live in Inidana and have seen all of these ads over and over. Clinton claims that Obama wants to keep paying the gas tax. I have not seen him for or against it, he uses it as an example of typical political gimmicks.

Clinton says she will use the oil company profits to cover the tax holiday. Obama says he'll tax their profits. Same difference as far as I'm concerned.

And really, how can either one of them promise anything CURRENT? Neither one of them will take office until January, if McCain doesn't beat them.

The fact checker did get it right on the orchard to the single apple however. You can't say $8bil for American families and compare it to $25-30 per person.
Then the supply and demand thing. I agree that the oil companies will probably just raise their prices to cover that difference and make even more.

What about all the promises to make the oil companies invest in alternative fuels? I am also a college student and recently did a speech on this, so I have done my research. Guess what? They already are! They aren't stupid. They now that the oil will run out, and they are going to have to have something to fall back on, such as a new fuel to sell to the energy starved masses.

In short, we are going to have to pick who we feel is the most honest candidate for FUTURE change. Until this election is over, in NOV. we will just have to suck it up and deal. Which is extremely hard I know. I am trying to attend school and get two young kids to activities on $50 a week. So I know exactly how tough it is, I'm not some well-to-do snob saying quit your whining. But there is nothing the Candidates can do til after they are elected, take office, and then get something passed through congress. My best guestimate is a year from now, if that soon. If we want something immediate, we have to go after the current congress and administration.

Posted by: Cathisto | May 6, 2008 9:56 AM | Report abuse

Come on commentators, is it that difficult to calculate with variables?

a) If the lower prices make demand go up and then the price higher.... what would then make the now higher price to the demand... and the prices?

b) If there is more demand and therefore more consumation, wouldn't that boost the "overall money" saved by consumers, since they consumed more gas without paying federal taxes to it?

To just play with one of several interdepend variables is not a good idea in prognostic calculations... and the main reason why amateurs lose to experts in Poker, Stock Market and tactical fights in political debate.

Yes, its not the smartest Idea Clinton had recently (I would take the windfall profit taxe without lowering the gas price, actually) but do criticize her on "math" should be done on accurate basis, at least its an excat sience, isn't it.

Posted by: Fairfis | May 6, 2008 10:18 AM | Report abuse

Uh, Fairfax Voter, why do you say prices will immediately go back up to current prices if the gas tax is removed because that is what the "market will bear"?

Doesn't the current market also indicate that suppliers are willing to supply gasoline at the current prices minus the gas tax?

You can't look at just one variable to arrive at an conclusion here. Maybe you should have taken a few more economics classes.

Posted by: John | May 6, 2008 10:27 AM | Report abuse

Equating the misrepresentations of Obama with those of Clinton here is exactly the sort of unenlightening and ultimately misleading "balance" that makes the MSM so worthless. One party is strenuously advocating a worthless policy with total fabrications; the other makes a small, technical error of attribution in his effort to contradict this wall of falsehoods -- and they both get the same rating. How very "fair" of you.

Posted by: drossless | May 6, 2008 10:28 AM | Report abuse

What affects gas prices is availability. Who's doing something about it? The MSM knows, but won't say.

http://uk.reuters.com/article/oilRpt/idUKL0444578520080504

Posted by: edwcorey | May 6, 2008 10:31 AM | Report abuse

I still try to examine these columns using the Pinocchio guidelines you've set out.

Here's what 2 Pinocchios is:

"Significant omissions and/or exaggerations. Some factual error may be involved but not necessarily. A politician can create a false, misleading impression by playing with words and using legalistic language that means little to ordinary people."

Obama doesn't seem to offer any significant omissions or exaggerations. He merely misattributed the location of a quote.

Hillary, however, seems to fall pretty squarely into the 3 Pinocchio category:

"Significant factual error and/or obvious contradictions."

I realize some of this is subjective, but I can't imagine how, to an unbiased observer, these two come out even on this topic.

Posted by: ManUnitdFan | May 6, 2008 10:39 AM | Report abuse


From "Head of State"
http://headofstate.blogspot.com/2008/05/gas-tax-holiday-multiple-choice.html

"Tuesday, May 06, 2008
Gas Tax Holiday: Multiple Choice

Hillary Clinton's claim that a Gas Tax Holiday will help middle class Americans, at the same time that her advisers have privately stated the opposite to the Washington Post, namely that they are aware that this will result in an increase in gas prices, and that it is "just politics", is most similar in political mindset and ideology to:

a) Former Bush Administration Chief of Staff Andy Card stating that the Administration waited until September to make its case for Iraq because `From a marketing point of view, you don't introduce new products in August';

b) Paul Wolfowitz predicting that the costs of reconstruction in Iraq would be paid for by oil profits from that nation, when contemporaneous predictions of the costs of the war and a subsequent insurgency would be, and have been, far greater;

c) Dick Cheney's prediction we would be greeted in Iraq as "liberators, despite numerous pre-war intelligence analyses which warned "that the U.S. would face armed resistance from Iraqis following the fall of Saddam Hussein's regime."

d) All of the above

Cite:
Head of State
http://headofstate.blogspot.com/2008/05/gas-tax-holiday-multiple-choice.html

Posted by: Robert Hewson | May 6, 2008 10:49 AM | Report abuse

Black and Bitter Like Coffee:

Perhaps another tank or two of gasoline is not big deal to you, but most American families in North Carolina and Indiana would appreciate it.

Posted by: JakeD | May 6, 2008 10:53 AM | Report abuse

You are so dumb like all the other reporters, again you fall for the republicans trap, talking about the side issue(gas tax), while nobody is talking about the real issue(why the price is only going up ?) why are all reporters so lazy that they just read us the PR paper sent by the energy industry.
How about examine how the fund manager are using our retirment money to hype the price, how about the effect of Bush's signals to the energy trader via the weekly enery report.

Posted by: Tawfiq | May 6, 2008 10:59 AM | Report abuse

Tawfiq:

We are discussing this, and what economists in favor of the gas-tax cut, are saying on other threads: http://blog.washingtonpost.com/the-trail/2008/05/05/economists_release_letter_oppo.html

Posted by: JakeD | May 6, 2008 11:07 AM | Report abuse

Mr. Dobbs:

Krugman addresses your point exactly in his blog. Perhaps you can update your article and provide the following link:

http://krugman.blogs.nytimes.com/2008/05/05/is-obama-misrepresenting-what-i-said/

The key phrase is:
"I did not say that the Clinton proposal would increase oil industry profits. If the ad implies that I did, it should be retracted."

Posted by: mnteng | May 6, 2008 11:08 AM | Report abuse

Well John, Fairfax Voter is mostly correct, gasoline prices will go up after the suspension of the fuel tax during the summer months. I understand this better than most bloggers because I too have taken economic courses in graduate school, worked in the oil industry and was a consumer of gasoline in Illinois back in 2000 when the State of Illinois suspended the state fuel tax (which was 27 cents per gallon at the time).

The only question you have to ask yourself is that if a "Gas Tax Holiday" was implemented over the summer months starting today would you drive more than you planned over the summer months?

I'm confident 97% or more driving age Americans will say yes. This means that the demand for gasoline will be higher than it is currently (and higher than expected future demand). To keep pace with the increased demand, oil refineries with their existing capacities will have trouble keeping up with the gasoline demand. More and more oil refineries will buy incrementally more crude oil to push their oil refineries to the max which will drive up the price of crude oil. At the same time, to prevent gas stations from running out of gasoline (being on TV as a company that ran short or out of gasoline is terrible publicity), oil companies will raise the price of gasoline.

Therefore, two pressure points will be applied to the price of gasoline to make it go higher. One is the increased demand and two is the fear of running short or out of gasoline at the gas station level.

In Illinois back in 2000, the suspension of the state motor fuels tax caused the price of gasoline to drop by 27 cents per gallon for one week, then slowly the price of gasoline increased again over the following 10 weeks in which the price of gasoline was actually higher without the state fuel tax. The suspension of the state fuel tax extended into December 2000 by which time the Governor of Illinois stated that Illinois had lost $150 million in tax revenue for the state transportation infrastructure and the price of summertime gasoline was unaffected.

The Illinois gasoline tax was re-implemented back in January 2001.

Posted by: AJ | May 6, 2008 11:25 AM | Report abuse

Obama and his followers commenting here today really are elitist who clearly do not need a free tank of gas or two. However, I do resent being called a "dumb voter" because I am financially strapped and shop around the neighborhood for the cheapest gas - even if it is cheaper by two cents. I also resent a leader and his followers thinking that most American citiziens can all go out and buy hybrid cars; and also pay more for alternative fuels. It does show how out of touch Obama and his elitist are with the current American realities.

This is one dumb voter who will take the .09 to .12 cent discount and then vote for the smarter politician who offered me a break. I will not be voting for a politician who thinks my pockets are as deep as his or who is cuddling up to big oil to protect them from a windfall tax at my personal expense.

Nobama says it all for this voter.

Posted by: Mary | May 6, 2008 11:34 AM | Report abuse

Obama's hate message:

Obama shows picture of an Arab Muslim in head scarf in his latest AD in IN and NC, while he "named Clinton" in the AD.

Picture of the Arab Muslim had no reason to be there, in fact, it seems it was super imposed on the picture of an oil field.

Hillary just showed picture of Osama (not Obama) in an AD without any "mention of Obama" and it caused huge Media fire storm.

Obama is a devious politician.

Posted by: Seed of Change | May 6, 2008 11:35 AM | Report abuse

Dobbs:

One of your links above (thanks for keeping it simple in "kids" language) notes that the "average" American uses 500 gallons of gasoline every year. Is that directly, or indirectly too? Per capita, or not? Does that factor in the disparity with high-end users, like mass transit or big rig drivers? Is it fair to say that the "average" family of four (not including driving-age Americans) use 2000 gallons?

Posted by: JakeD | May 6, 2008 11:41 AM | Report abuse


Posted by: AJ | May 6, 2008 11:25 AM

I'm not sure what you did in the oil industry but it definitely had nothing to do with refining and supply of gasoline. We are currently running our refineries at 85% and have plenty of capacity to meet US gasoline demand needs. Currently our gasoline stocks are at historical highs and we have plenty of gasoline available from Europe, Asia and the Latin America as the rest of the world continues its move towards diesel yet their refineries are still producing gasoline (check your oil refining 101 book).

Combine that with the mandated ethanol volumes in the US and the world is looking at a significant oversupply of gasoline and I have not once heard anyone in the oil industry talk about gasoline production shortages...quite the contrary they are now looking at closing refineries because the demand for gasoline just isn't there. Valero and other major US refiners showed break even or losses in their 1Q2008 US downstream earnings, further backing the proof that gasoline is not priced in line with current crude prices.

The only logical argument against high oil prices is to go after the billions that is being thrown into the commodities markets from people who have nothing to do with the energy industry. If they closed the "Enron" loophole as they are proposing to do this would bring the price of crude back into reality...aka $60-$70 range.

Consumer have to ask if they want to see a maximum price decrease of $0.18/gallon with the Clinton/McCain idea or do they want to save $1.50/gallon with the regulations that both republicans and democrats are trying to pass through congress right now? Unlike McCain, Clinton and Obama some people in our gov't are still doing their jobs and trying to do something about the situation rather than talk about BS short term crap that will throw our highway dept. another $9 billion + shortfall in summer funds.

Posted by: Refiner | May 6, 2008 11:45 AM | Report abuse

Refiner:

If we started releasing 4.4 million barrels per day from SPR, would that overload our current excess refining capacity?

Posted by: JakeD | May 6, 2008 11:51 AM | Report abuse

Jake D:

Averages are commonly used by economists and others to describe useage of goods and services. Mr. Dobbs is not obligated to describe it in that kind of detail as you suggest.

I have seen you posting on many many articles and blogs in the Post. I never take you seriously when I see your name, because I know you just like to hear yourself talk. You would get a lot more respect if you used thoughts and words sparingly.

Posted by: Anonymous | May 6, 2008 11:56 AM | Report abuse

Of course, Mr. Dobbs is not obligated to describe it in any kind of detail -- we can pose those questions for discussion though -- also, if you think I am here to "get a lot more respect" you would be mistaken. By all means, continue to never take me seriously. Over and out.

Posted by: JakeD | May 6, 2008 11:59 AM | Report abuse

Refiner,

That is a really informative posting. Should be more widespread so people can see for themselves that Clinton isn't dealing in the world of facts. Whether Obama realizes this or not is a moot point since he isn't the one trying to gain political points with energy pricing.

Posted by: susan | May 6, 2008 12:00 PM | Report abuse

When is this gas holiday tax suppose to take place ? Neither candidate is 'president', so how do they propose to give a gas tax this summer ?

I have to agree with alterego1 on this one:

But the worst part about all of this is that, regardless of the truth that the gas tax holiday (a) won't become reality because it has not nor will it be proposed in Congress and (b) is a stupid idea, economically, because increased demand will wipe out any cost savings, people will still vote for Clinton merely for bringing up the issue even is she is doing nothing to actually promote it. Am I elitist for realizing the distinction between a go-nowhere gimmick and reality?

Posted by: alterego1 | May 6, 2008 8:59 AM

Why would the candidates choose to discuss an issue that they can't immediately do anything about ? And why would the media continue to play into this game ?

Posted by: Jim | May 6, 2008 12:31 PM | Report abuse

Jim:

The proposal was, indeed, for the 97 days between May 26 and September 1, 2008. If Nancy Pelosi and Harry Reid wanted to, they could get the bill to President Bush's desk this afternoon.

Posted by: JakeD | May 6, 2008 12:34 PM | Report abuse

Hillary says "We're going to go right at OPEC". "They can no longer be a cartel, a monopoly that get to gether once every couple of months."

Huh??

Does any Hillary supporter actually believe that Ms. Clinton can back up such claims? The price set by OPEC, and the amount they produce, is driven by global demand, not the whim of a U.S. politician. Neither Hillary, nor Obama, nor McCain can reverse this trend. The brute facts of dwindling world supply and increasing demand determine where we are. At least Obama seems willing to acknowledge this.

Underlying the 'gas-tax' nonsense is a willingness by working Americans to be patronized by a skilled politician. I am one of those Americans and am just amazed at the delusional logic employed by Clinton to win over a few more votes and claim victory. The path she has taken in this campaign is so discouraging to me, though I will vote for her in November if it comes to that.

We need to be critical of what our politicians promise us. Hillary is making false promises that are designed to sway voters in the moment. That's a cynical ploy, one that speaks down to working people.

All citizens have the power to reason and think clearly about the truth if they so choose. They can reject political pandering and cease to be the helpless lemmings they're being treated as.

Our government can't change the course we're on through our dependence on oil. But each individual, through his or her own actions, can.

WAKE UP!

Posted by: geraldmc | May 6, 2008 12:39 PM | Report abuse

Um, how the heck is 48-64 cents and 30 cents COMPARABLE...!? I mean yes its just cents, but "comparably," thats a lot of cents.

Posted by: Mike E | May 6, 2008 12:39 PM | Report abuse

Mike E:

30 x 2 = 60

Posted by: JakeD | May 6, 2008 12:44 PM | Report abuse

geraldmc:

I have cited to (at least) THREE economists, in the thread below, who concede the gas-tax cut will be passed on to the struggling Americans who need help NOW!! If 28-64 cents a day is not a lot to you, you can donate that to someone more deserving (and get a tax right-off ; )

http://blog.washingtonpost.com/the-trail/2008/05/05/economists_release_letter_oppo.html

Posted by: JakeD | May 6, 2008 12:46 PM | Report abuse

===========================================

jd


ONLY A MORON WOULD SIT THERE LIKE A ZOMBIE AND BELIEVE THAT EVERY AMERICAN WILL SAVE $28 DOLLARS THIS SUMMER, SHOULD THE GAS TAX BE TEMPORARILY REPEALED.

HERE'S THE FACT,

SOME AMERICANS DON'T DRIVE, AND THEY WILL SAVE NOTHING, SOME DRIVE ONLY A LITTLE AND THEY WILL SAVE LESS, SOME DRIVE MODERATELY AND WILL SAVE A LITTLE MORE, AND SOME LIVE IN COMMUTER TRAFFIC, AND THEY WILL SAVE A LOT MORE.

AND TRUCKERS, THEY WILL SAVE HUNDREDS AND HUNDREDS OF DOLLARS.

SO YOU SEE, ONLY A MORON WOULD SIT THERE AND BELIEVE EVERY AMERICAN WILL SAVE $28 THIS SUMMER, AS THE OBAMA SPIN DOCTORS WOULD LIKE YOU TO BELIEVE.

IF ANYTHING, CLINTON MAKES A GOOD GESTURE HERE, AND OBAMA AGAIN COMES UP WITH NOTHING!


jd

===========================================

Posted by: Johnny Democracy | May 6, 2008 1:08 PM | Report abuse

there's enough hot air coming out of the obama campaign to finance a mulit-national ballon race around the planet, many, many times!

Posted by: zoe | May 6, 2008 1:12 PM | Report abuse

I don't think I said "every" American -- I said the "average" American.

Posted by: JakeD | May 6, 2008 1:15 PM | Report abuse

Which gas tax cut are you talking about, JakeD, Hillary's, or your man McCain's?

And by the way, since you're a Republican, why do you spend your entire life here arguing on behalf of Hillary? You want her to lose the election. Not much of an endorsement. You just want to weaken the Democrats.

And tell me this: if the gas tax cut is such a great idea, why just run it for the summer prior to an election? Why stop this wonderful policy on Labor Day? Why don't Hillary and McCain propose continuing this brilliant idea during their presidencies?

Is it because continuing it would dent their budgets, weaken infrastructure and hurt the economy (not to mention harming the environment, as if they cared)? Because they know it's a short-term useless gimmick?

Or is it just because they won't need to buy votes after then?

Posted by: B. Kaufmann | May 6, 2008 1:28 PM | Report abuse

Jim:

The proposal was, indeed, for the 97 days between May 26 and September 1, 2008. If Nancy Pelosi and Harry Reid wanted to, they could get the bill to President Bush's desk this afternoon.

Posted by: JakeD | May 6, 2008 12:34 PM

And that being said, do you think President Bush will sign the bill ? And what can Clinton or Obama do about it one way or the other ? Help me (and a lot of others I would imagine) understand what each candidates' role is in this besides the hot air being blown about it. Does anyone really think that by voting for Clinton or Obama today that they will make a difference on what President Bush's decision will be should the bill reach his desk ?

Posted by: Jim | May 6, 2008 1:32 PM | Report abuse

If this idea made any sense, why limit it to summer. It is worse than pandering; it is bribery for our votes and cheap bribery at that.

Posted by: Jeff Gilbert | May 6, 2008 2:00 PM | Report abuse

If this idea made any sense, why limit it to summer. It is worse than pandering; it is bribery for our votes and cheap bribery at that.

Posted by: Jeff Gilbert | May 6, 2008 2:00 PM | Report abuse

Your criticism ssuggesting that Hillary is dishonestly comparing apples to an entire orchard is exactly BACKWARDS. It is Obama who has taken the $8 billion propected savings and reduced it to 30 cents per driver. Clearly it is Obama who is distorting facts and attempting to confuse the average voter, whom he believes to be several notches below his intellectual status. By the way, has anyone noticed how dramatically HIS accent changes when he is in the South or speaking to Black audiences. Amusing, isn't it??

Posted by: Rick | May 6, 2008 2:35 PM | Report abuse

Jim:

What JakeD conveniently omits is that there is no bill in either the Senate or the House proposing a Gas Tax Holiday, with or without a windfall profit tax. So, at this point, it really doesn't matter what GWB thinks about it.

I suppose HRC or McC could propose an amendment to some other bill, but that piece of legislation will certainly take a lot longer to get passed.

Posted by: mnteng | May 6, 2008 2:37 PM | Report abuse

Okay, I don't agree with dropping the gas tax but, let's look at this another way. Gas is going to cost over $4.00 this summer anyway (with or without the gas tax). 18 cents is a small amount but, at least it was a thought. I don't see anyone else coming out with a plan. I would do the reverse and double the gas tax. Tax the revenues from the increase to build better roads, mass transit systems, and invest in solar, wind, and geo-thermal energy. I guess I won't get anyone's vote for that idea.

Posted by: Mike1963 | May 6, 2008 2:39 PM | Report abuse

jd
The other half of Obama's argument is that elimination of the tax also means elimination of road construction and jobs. Only a moron who lives in their own little world would omit that FACT.

Posted by: Indiana resident | May 6, 2008 2:44 PM | Report abuse

jd and others
Do you actually believe that suspending the tax will save you from ruin? The decisions you have made have put you in this situation and this proposal will not save you. When you spend money that you don't have to satisfy your immediate cravings at the cost of putting your very financial stability in jeopardy then you are a moron and part of the problem. This proposal is the same thing.

Posted by: Indiana resident | May 6, 2008 3:05 PM | Report abuse

mnteng - H.R. 1252 to punish gasoline price-gouging was already passed in the House last year. It it awaiting action by the Senate and could easily be amended by either Clinton or McCain to include their summer gas tax relief. Whether it would pass, as amended, or signed into law by Bush is another matter.

Posted by: Mary | May 6, 2008 3:06 PM | Report abuse

Jim:

I take that back. S.2890 (sponsored by McC on 4/17/08) and S.2971 (sponsored by HRC on 5/2/08) have been referred to committee as of today. The text of McC's bill is on Thomas, but HRC's hasn't be put on the website yet.

So, if Harry Reid wanted to put either up for a vote, it could happen soon. But it still doesn't matter what GWB thinks right now, as there is no similar measure in the House.

Posted by: mnteng | May 6, 2008 3:11 PM | Report abuse

S. 2890 already has 9 co-sponsors.

Posted by: Mary | May 6, 2008 3:25 PM | Report abuse

What a weak attempt to level the argument. FactChecker used to be hard-hitting and revealing. Now it just panders that both sides are wrong under the "Gas Tax Wars" heading. Terrible. I'm un-bookmarking this site.

Posted by: Jenni | May 6, 2008 3:26 PM | Report abuse

Mary:

You're right, of course. Maria Cantwell has proposed similar legislation in the Senate (S.1263). Unfortunately, those bills have been stuck in committee since May of last year.

Interestingly enough, Cantwell also proposed a refund of federal gas excise taxes -- on "actual off-highway use of certain mobile machinery" (S.2401), which, based on the co-sponsors, I take to mean farm equipment.

Posted by: mnteng | May 6, 2008 3:28 PM | Report abuse

If Clinton and McCain want a gas tax holiday for the summer why haven't they introduced it? They are both Senators. Passing legislation is what they are supposed to do. They should introduce a bipartisan bill and get it done -- or shut up about it.

Posted by: Keith L | May 6, 2008 3:48 PM | Report abuse

"I have cited to (at least) THREE economists, in the thread below, who concede the gas-tax cut will be passed on to the struggling Americans who need help NOW!!"

I am very interested in reading these citations, but honestly, I'm not interested enough to scour through a million posts to find them. Can't you give a link or something?

Posted by: DDAWD | May 6, 2008 3:53 PM | Report abuse

"Your criticism ssuggesting that Hillary is dishonestly comparing apples to an entire orchard is exactly BACKWARDS. It is Obama who has taken the $8 billion propected savings and reduced it to 30 cents per driver."

Well, that is the point, isn't it? To split the money among the individual drivers? It's not like you're taking the $8 billion collectively and putting it towards some common good.

Of course not, since that's the purpose of the tax in the first place!!

Posted by: DDAWD | May 6, 2008 3:57 PM | Report abuse

fwiw former Speaker Gingrich has come out in favor of the gas tax holiday (you may not agree with his other nine points either).

http://newt.org/tabid/102/articleType/ArticleView/articleId/3393/Default.aspx

Posted by: Mary | May 6, 2008 3:57 PM | Report abuse

"Gas is going to cost over $4.00 this summer anyway (with or without the gas tax). 18 cents is a small amount but, at least it was a thought. I don't see anyone else coming out with a plan. I would do the reverse and double the gas tax. Tax the revenues from the increase to build better roads, mass transit systems, and invest in solar, wind, and geo-thermal energy."

I think you refute your own point here. If you can use the gas tax for public works stuff, why is going in the opposite direction commendable simply because it is some form of action? If the plan of doing nothing is preferable to the plan of doing something, I'd much rather do nothing. I think the idea of crediting Clinton simply because she is doing SOMETHING is complete nonsense. Wouldn't you much rather Bush have done NOTHING with Iraq instead of what he did do? Sure, there might be better options (for Iraq and gas prices), but I'm not going to commend a bad idea simply because its more kinetic.

Posted by: DDAWD | May 6, 2008 4:02 PM | Report abuse

Keith L:

Actually, they both have bills in the pipeline, as I referenced in my 3:48P post. The problem is that HRC apparently wants to pay for the gas tax holiday by a windfall profits tax on the oil companies while McC just wants the tax holiday. So, it's unlikely there will be a bipartisan bill (unless you count Joe Lieberman, who co-sponsored McC's bill, as a D).

But really, nothing will get done unless Harry Reid wants it to happen.

Posted by: mnteng | May 6, 2008 4:06 PM | Report abuse

fact: oil demand has decreased recently.
fact: this should drive down the price of oil and reduce profits for big oil.
fact: there is no chance, not 1%, 0% that a windfall tax on oil companies will happen by this summer.
fact: if the oil companies did eat that tax (please!) but demand went up, they make more $$ and would raise prices anyway.
most important fact!!! if your intelligence is not insulted by this ploy, you are an idiot!

Posted by: estevegrande | May 6, 2008 4:11 PM | Report abuse

So Clinton grossly exagerates and Obama uses a quote meant for McCain and he gets a pinochio too?

McCain and Clinton are both proposing a gas holiday. It doesn't matter what source Obama used to push the AD.

Posted by: OldManTalking | May 6, 2008 4:51 PM | Report abuse

estevegrande's facts:
oil demand has decreased recently.
this should drive down the price of oil and reduce profits for big oil.

The truth (if you've checked the prices at your neighborhood gas station recently):
The price of gasioline has gone up.
Here's what's happening today courtesy of the Wall Street Journal:
Crude settled above $121, continuing a three-day winning streak in which it has soared 8.3%. 4:44 p.m.

In fact, the short term demand curve for petroleum is inelastic, which means that people will buy gas at ever increasing prices. Long term, however, they will change their consumption patterns. That's why even more people are riding Metro, even though the fares have increased, because they can substitute one form of transportation for another. Those of us who have no easy access to public transportation, however, are stuck paying the increasingly increasing prices for gasoline.
As for paying for a gas tax holiday with an excess profits tax, there is a small disincentive for companies to increase the price of gas, because the revenue they receive from the increased price will be taxed away.


Posted by: An economist | May 6, 2008 4:53 PM | Report abuse

to an economist:
it looks like you read my post but completely missed the point. the point was there is no chance a windfall tax will be in place this summer and it's unlikely ever (i completely support a windfall tax). this means hillary is blatantly lying and i hope americans are bright enough to understand that. the lesser point is less demand should drive down oil&gas prices but it hasn't.
on a side note isn't it interesting that every time oil goes down a bit there is a "supply threat".


Posted by: estevegrande | May 6, 2008 5:51 PM | Report abuse

First you did not explain anything last week, you wrote about an opinion from someone which said "gas demand goes up during summer months", real expert opinion Einstein!

Where is the data from the economic study. You are a paper, provide data so people can figure out.

It is well known fact between $45 - $55 is added to a barrel of oil by pure speculators. Exxon CEO said it during Congressional hearing last month. If the plan is implemented with wind fall tax on profits and if the law is written tightly, it will benefit.

Has any Economist done complete analysis instead of sound bites.

Publish the data WaPo

Posted by: Independent | May 6, 2008 5:55 PM | Report abuse

Well I think I've heard enough.

News Flash: "THE FACTS: In 2000, gasoline prices were climbing quickly, reaching $2 a gallon in the Chicago area -- a remarkable price back then. Illinois legislators scrambled to offer some election-year relief to angry motorists.

Obama voted three times for a tax holiday..."
Source: http://news.yahoo.com/s/ap/20080430/ap_on_el_pr/obama_gas_tax_fact_check

For the Clinton-haters out there, wake up!
Obama has never been consistent in his message. Picture our next President changing his answer every time he's under oath. How annoying would that be? It seems like you would vote for him no matter what. He speaks of change, but hardly has a plan or gives us details. How do you know he's not going to be another Bush who didn't get anything done in the White House and let our economy suffer? We don't need a Wimp we need a Leader!

Posted by: Anonymous | May 6, 2008 5:56 PM | Report abuse

Wow! I leave for the afternoon (B. Kaufmann) and an actual debate breaks out?! Look, guys, now that Barack HUSSEIN Obama is going to be the Dem nominee, there's not realistic way to get the gas-tax cut passed. Oh well ...

Posted by: JakeD | May 6, 2008 6:15 PM | Report abuse

NEWSFLASH --

FROM PROFESSOR PAUL KRUGMAN'S BLOG --

May 6, 2008, 9:19 am

Gas tax hysterics

OK, this has gone overboard.
Hillary Clinton's proposed gas tax holiday is not, in my view, a good idea. But the furor over what is, when all is said and done, a small and temporary policy proposal is entirely disproportionate. What's going on?
Part of it, clearly, is the fact that many people in the media really, really want Obama to win and Clinton to lose -- read Kurt Andersen -- and have seized on the gas tax as their latest proof that she is ee-ee-vil.
But there's also something going on with economists, a phenomenon I recognize wearing my other hat: the tendency to place excessive weight on issues where professional judgment differs from lay opinion.
The classic example is free trade versus protectionism. Economists are justly proud of the close reasoning that produced the classical case for free trade, and love to skewer dumb protectionist arguments. I've done it myself.
But all too often, economists then become like the little boy with a hammer, to whom everything looks like a nail. Because protectionism is an issue on which they believe they have some special insight, they inflate its importance, and make free trade versus protectionism THE crucial issue in economic policy -- which it isn't. Trade barriers are a minor issue for the United States today; even small wrinkles in health care policy, like overpayment to Medicare Advantage plans, probably matter more to public welfare than all the trade restrictions now in place.
Yet economists talk much more about trade than they do about health care policy, because they think they know something about it in a way the laity don't.
The gas tax holiday is in this category. Economists really do know something about tax incidence that the laity don't. So when a presidential candidate says something that conflicts with economistic wisdom, it becomes THE MOST IMPORTANT ISSUE EVER. Except, you know, it isn't.
There's a lot of troubling stuff in both Democrats' proposals. Mandates aside, Obama is seriously low-balling the cost of health care reform, and promising way too much in middle-class tax cuts. Clinton's numbers don't quite add up either, though she's probably closer to the mark -- and both Dems are towering figures of responsibility compared with McCain. Amid all this, the gas tax holiday is a real issue, but a small one; don't let economist's tendency to overemphasize their areas of expertise distort your view.

Posted by: Anonymous | May 6, 2008 6:45 PM | Report abuse

What you fail to include in your analysis is that Clinton's statyement that she would pay for the tax break by means of a "WINDFALL" profits tax on the oil companies. She of course knows that there is no chance in hell that Congrss is giong to pass such a tax this summer of, even ig they did, that such legislation would ever be signed into law by Bush.

Posted by: Richard Blair | May 6, 2008 7:04 PM | Report abuse

This "fact check" is almost as bad a pander as Hillary's original proposal.

Let's see: 230 economists, including Nobelists, are on the record slamming the proposal as stupid, unworkable, dishonest, and counterproductive. So you comment that a Clinton ad uses fudgy numbers in discussing Obama's response. (Not, note you, that you mention that Obama used the CBO's numbers).

Obama said the proposal wouldn't produce any money to the consumer, and would only encourage wasteful spending. Your cavil is that when his ad cites Krugman for this point, it fails to note that the citation is to his blog, and not his column.

And you give them each two Pinocchios? How long is your nose about now?

Posted by: Helen | May 7, 2008 12:21 AM | Report abuse

Leave it to Hillary to come up with a very STUPID and lame scheme to try and sucker people into thinking that she has a "great" plan to help us Americans with the gas crisis. I knew very well that it was all baloney and that nothing she says is truth but pure bullsh_t!

How can people actually believe that this proposal that she recklessly throws out there would even begin addressing the real problem in this out of control crisis. What is needed is a true alternative to oil. We need to be the new superpower of the alternative energy. But unfortunately, our corrupt government with its unscrupulous politicians are so greedy that they will put their insatiable lust for power and money over the dire needs of the American people. We as a nation did not learn from history. Just remember how bad it got for all of us during the 1973 oil crisis. Do you think we would have used that moment in time to change our way of thinking and not be so dependent on oil and look and develop an alternative form of energy? It all comes back to GREED!!!!

Those few in control could care less about the future of this nation so long as their pockets are full of MONEY. From what I see, no one is doing anything about it either. This nation is going down a very dangerous road which we haven't seen the likes in who knows how long. Can we say, the great depression!

Posted by: Carlos | May 7, 2008 2:27 AM | Report abuse

ALL OF THE CANDIDATES RUNNING FOR THE PRESIDENCY ARE LOSERS! Not one of these losers are going to change anything from what we have right now. All the promises in the world are not going to make things better because, (REALITY CHECK PLEASE), the president cannot change things on his/her own. Congress and the Senate are the ones that can actually make things happen and all of them are in the same boat of losers. They are in a little club of losers that refuse to help this nation. The GREED that is in these phonies hearts is beyond our comprehension. Their respective ambition is one and only one, HOW DO I GET WHAT I WANT AND WHO DO I HAVE TO SQUASH IN THE PROCESS TO GET IT!

If these losers really wanted to help our country, then all they need to do is become human again and realize that they need to work together and put aside any "party" differences and come up with a true relief plan that will provide the needed help. Have true compassion for your fellow brothers and sisters and do something positive--WORK TOGETHER!

Our time is running out and we are digging ourselves one HUGE hole which we will not be able to get out of. Once again, none of the so called "candidates" is ready and deserving of such a position.

Posted by: JD | May 7, 2008 2:43 AM | Report abuse

The Fact Checker is about as shameful as Hillary on this one.

Obama is clearly the only honest one of the bunch. Fortunately Americans are not as dumb as you media guys would like to think we are.

Posted by: Doug M | May 7, 2008 3:45 AM | Report abuse

These Poll Results are quite interesting...

2008 Presidential Election Weekly Poll
http://www.votenic.com
Results Just Posted!

Posted by: votenic | May 7, 2008 10:40 AM | Report abuse

Here is what I don't get. Not a single expert denigrating this short term tax windfall idea, that I have read so far, Mangkiw, Krugman, Friedman, has explained how their viewpoint will apply to THIS summer. One in thirty homes are in foreclosure Stockton Ca, Denver area has their own problems; a significant number of US citizens will not be spending money on vacations this summer. The economy is slow or in recession, therefore how will this be a big shipping season.? Obama has suggested the saving would only be $0.30 a day. This appears to assume a use of 2 gal. of gas a day. I certainly use more than that. If the desire is to help those working who must travel and help local economy the idea has merit.

Gas prices might move all sorts of directions this summer. There is no assumption in Clinton's proposal that says prices would be lowered if implemented. There is an offer that some who must drive more would get a little relief. Your pizza delivery price, for example might remain the same a little longer. Your contractor might not raise their rates.

In addition, both democratic candidates propose use of windfall profits taxes in their energy plans. Clearly then, there is an apparent disconnect in Obama's positions regarding the use of windfall profits taxes. It does not appear logical that they would drive up gasoline prices and not other energy sectors.

Clinton clearly said that any funds used would be replaced by the windfall profits tax. Bridges and roads would not lose money. She has asked for congressional support, and supporters to put their name on the line. If they can't do it now for something so simple, how will they do it for the new energy proposals? It is a chance to stand apart.

Posted by: roofingbird | May 7, 2008 10:44 AM | Report abuse

For the supporters who believe the holiday gas tax period is a good ideal then why not include suspending state's gasoline tax for the same period as well. It's about the family saving money at the gas pump right?

Posted by: Anonymous | May 7, 2008 3:37 PM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2011 The Washington Post Company