Obama vs. The Clinton/McCain Party on the Gas Tax

John McCain has admitted he doesn’t know much about economics. That might explain his views on the gas tax, but what’s Hillary Clinton’s excuse? It must come down to the fact that she continues to attract the votes of the less educated, low-information voters who would see saving money as reason to vote for her. Unfortunately they won’t save very much.

Not only is this another case of Obama vs. Clinton and McCain, but most who have written on the topic agree that the gas holiday is a terrible idea. Jonathan Alter writes:

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.

Clinton and McCain have learned a destructive lesson from the Bush era: as Bill Clinton said in 2002, it’s better politically to be “strong and wrong” than thoughtful and right. The goal is to depict Barack Obama as an out-of-touch elitist. By any means necessary.

I could highlight a long debate among economists on suspending the gas tax, but there is no debate. Not one respectable economist—and not one environmentalist or foreign policy expert—supports the idea, unless they are official members of the Clinton or McCain campaigns (and even some of them privately oppose it). To relieve suffering at the pump, send another rebate check or provide tax credits or something else, but not this.

Alter proceeds to give a long list of reasons why the idea  is bad, including that it helps the terrorists.

The New York Times has an editorial on the tax which makes me wonder if they regret their earlier endorsement:

Senators John McCain and Hillary Rodham Clinton have hit on a new way to pander to American voters: a temporary suspension of the federal gasoline tax between Memorial Day and Labor Day. The proposal may draw applause and votes from Americans feeling the pain of nearly $4-a-gallon gasoline. But it is an expensive and environmentally unsound policy that would do nothing to help American drivers.

Leave aside that suspending the 18.4-cent-a-gallon excise tax would cost the deficit-burdened federal government $9 billion and that turning a tax off in May and on in September would be an administrative nightmare.

Even leave aside that nixing the gas tax would increase demand for gasoline — exactly the wrong response to global warming and rising energy prices. So wrong, in fact, that both Mrs. Clinton and Mr. McCain support policies that would cut carbon emissions and increase the price of energy. (Talk about voting for something before they voted against it.)

The fact is that drivers would, at best, see only the briefest reduction in prices at the pump. Gas prices rise during the summer season of heavy driving as rising demand pushes refiners to produce virtually at full capacity. If a suspension in the excise tax reduced the price at the pump, it would encourage even more driving. This would simply push prices back up. Oil companies would be grateful, drivers less so.

The gas tax isn’t the only case where Clinton is trying to obtain votes by misleading the voters. McClatchy reports on how Clinton is attacking Bush for not stopping a program which cost Indiana jobs. There’s one problem with her attack on Bush. It was Bill Clinton who approved the project.

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