John McCain makes gas prices a political issue

John McCain took a look at the price on the neighborhood gas pump (OK, somebody probably looked for him) and decided a little relief is in order -- so he's introduced legislation in the U.S. Senate that would suspend the federal gas tax for the summer. This is no small thing -- 18.4 cents per gallon for the unleaded most people use, and 24.4 cents per gallon for diesel, on which the nation's trucking industry runs (think strawberry prices). The potential consumer savings are huge -- assuming they'd get passed along.

Of course, in the Democratic-controlled Senate the chances of the bill getting through in an election year are slight -- about the same, we'd guess, as the chances of gas falling below $3 a gallon. But this is where it gets fun. Come fall, McCain will be able to say that he tried to do something and the Democrats wouldn't cooperate. He even sent a letter to Hillary Clinton and Barack Obama -- his colleagues in the Senate before they were his rivals for the White House -- asking them to join him.

Shrewd move, that. Lovely placing of the piece on the chess board while Obama and Clinton are still squabbling over who gets to play their side of the board. And the counter-move, if there is one, will likely be pressing McCain on the financing. McCain says he'll replace the lost revenue to the Highway Trust Fund from the general fund -- which is already facing a massive budget gap.

A footnote of interest: One of the cosponsors of McCain's bill is Joe Lieberman, the former Democratic vice presidential nominee and former Democrat. Technically, he's an independent senator from Connecticut now but is usually included in the vote count that determines the Democrats control the Senate. He endorsed McCain in December, so that bridge is already burned. But it has to be galling to some in the halls of Congress to have their former veep nominee -- Al Gore's running mate -- stumping for the other guy.

-- Scott Martelle

Comments

[TH]

What's 18cents when gas has risen over a dollar in the last few months? Political BS that's not addressing the real problems causing oil to be over $120 a barrel and rising.
This will do little except add to the deficit.

[Keith]

This is a bunch of blah blah blah BS. The real story is that the gov't sqashed competion and hindered the growth of supply opportunities (new refineries) with stringent environmental policies and failed to protect the consumers on the demand side. It's a beautiful situation for the gas co's, everyone knows the truth, including Congress already, they just dog and pony show it every year to make people think they are soooo concerned. There is NO shortage of oil like during the 1970's embargos, it's gov't failing to protect the consumer after constricting the markets. IIRC the big oil co's were originally planning to fight the enviro restrictions decades ago, until some bright MBA stood up and said "Fight it? This is great for us! And it is, and will continue to be.

[Javalation]

There are a few problems with the idea, but Republicans don't let little things like logic interfere with their pandering for votes.

Doesn't this tax revenue go toward building and repairing bridges and the interstate, and haven't we recently learned that a huge percentage of our bridges are obsolete or badly in need of repairs. Also, wouldn't encouraging Americans to drive a lot this summer be counterproductive to what they need to do, pay down debt and save money?

[LarryOregon]

Good! I am sick of the HITLLERY Clinton attacks on Obamma. I am glad to see an article about something with substanance. Thank you LA Times!

[Tom]

I applaud McCain for at least trying to make it people can afford to get to work. I have yet to see the Democrats come up with a plan other than tax the heck out of everyone and then spend only a 1/10th of the money on what it was intended for!

[B.J.]

Hey John, how about thinking of some permanent solutions instead of band aids to help you get elected? Leave the 18 cent tax on. Based on our rate of gas consumptions that comes to around $35 million a day. Now use that $35 million a day to build better public transportation systems so we don't need to buy so much gas for cars to begin with.

[John]

Nobody cares about Joe Lieberman. Gas prices are attributed entirely to the Bush administration. This doesn't help McCain at all, he needs to seperate himself from Bush and the rest of those stodgy, old Republicans. Clinton is simply a monkey on Obama's back until he locks up the nomination. Obama will be the next President when this is all said and done.

[somegal]

How much gas does a scooter need?

[Sam]

If McCain cared about reducing gas prices, he would not vote against additional drilling in Alaska. If we did more drilling in Alaska, thus becoming less dependent on Middle East oil, McCain wouldn't be able to keep us fighting in Iraq for another 100 years.

[pete brosig]

McCain can't propose gas tax elmination what would he replace the lost revenue with ,Cindy's income??

[Tim]

Can someone tell me how we can keep cutting taxes without decreasing spending when we are in major debt? Let's here some long term solutions please, not political BS.

[Rothman]

It could lower prices in the stores and probably benefit the economy. I hope Obama and Clinton support the bill in a non-partisan manner. It would be a breath of fresh air if they all could agree on something good for the American people.

[Daly]

Has McBush thought that gas prices are very much tied to his war and the giant sucking sound that it is causing?
End the war ASAP

[BRH1]

A savings on gasoline costs could have a big effect on the economy. Inflated gas prices are what's driving up the cost for merchandise. When it costs less to ship it costs less to buy= more money in our pockets to buy more things which will stimulate the economy. Brilliant republican philosophy!

[Mike]

Echoing the sentiments of BRH1. People are left with hard choices now, namely what to do without so that they can still afford to get to work. Consumer spending is directly proportional to...wait for it...the ability to spend. If congress really wants to fix this, forget tax suspensions and other smoke-and-mirror tactics. Flex some muscle and start throwing some of these oil execs in Jail. I'm sure there is ample reason if someone takes the time to look.

[Josef Bart]

Give me a break please. Why do Americans always moan about gas prices? They buy the largest fuel drinking cars known on the planet and bitch if gas hits $3.50 or so a gallon. Depending on which country, gas prices in western european countries range from $7.50 to $10 a gallon (converted from litres/euro)
The entire U.S. national debt could have been paid off long ago if they added 5 cents per gallon tax back in the 70's but oh no! Stop complaining and buy a more fuel efficient auto.

[yoohoo]

Like most truly political moves, this is a great gesture but totally useless for the average man. Way to feed the oil industry! Way to show who McCain's core constituency really is....

[Dave]

If an 18 cent tax cut is the best we're getting from any of the candidates (and it is so far), we're all doomed.

@Mike

Oil companies are making record profits on record revenues. The margin hasn't really changed much over the last 30 years. They're selling more of it, you're buying more of it. And now you're competing with folks like the Chinese and the Indians for it. Economics 101 says the price should rise. Add that to the fact that Exxon and Shell don't have near the influence over the price as do the producers, and you don't have much of a case against oil companies.

Isn't it time to figure out a solution instead of just trying to prolong the inevitable? Huge solar arrays, nuclear power, electric cars...why not?

[Maddie]

Something really needs to be done about gas prices, it's getting to the point where it's not even funny! I haven't seen gas prices this high in my life, this is a major first!!!

[gasman]

from maria cantwell

One reason is we have seen the price of oil more than double from $60 to $135 is just over two years without major supply disruptions. We have also been plagued by manipulation in other energy markets.

Enron and others manipulated the Western electricity markets in 2000 and 2001 and cost consumers over $40 billion. In light of that, Congress gave the Federal Energy Regulatory Commission new authority in the Energy Policy Act of 2005.

Specifically, Congress made it “unlawful for any person … to use or employ … any manipulative or deceptive device or contrivance,” in connection with the wholesale electricity and natural gas markets. We’re going to hear today from FERC’s Deputy Director of Investigation and Enforcement on how FERC has used its new authority to root out manipulation in physical electricity and natural gas markets.
To date, FERC has used its new authority to conduct 64 investigations resulting in 14 settlements totaling over $48 million in civil penalties. We have seen the very same energy traders move from Enron to Amaranth, and American families and business alike have the same concerns about potential manipulation in our oil markets.

Last December 2007, Congress granted the FTC anti-manipulation authority in the Energy Bill. Specifically, Congress made it “unlawful for any person … to use or employ … any manipulative or deceptive device or contrivance,” in connection with the purchase or sale of crude oil, gasoline, or petroleum distillates at wholesale.
During the hearing is was reported Michael Greenburger (the former speculation committe chairman) reported that gas could drop 25 to fifty percent. If spectulation could proprerly regulated would get prices back under control would drop the almost right away. These controls were removed in 2000.

One reason is we have seen the price of oil more than double from $60 to $135 is just over two years without major supply disruptions. We have also been plagued by manipulation in other energy markets.

Enron and others manipulated the Western electricity markets in 2000 and 2001 and cost consumers over $40 billion. In light of that, Congress gave the Federal Energy Regulatory Commission new authority in the Energy Policy Act of 2005.

Specifically, Congress made it “unlawful for any person … to use or employ … any manipulative or deceptive device or contrivance,” in connection with the wholesale electricity and natural gas markets. We’re going to hear today from FERC’s Deputy Director of Investigation and Enforcement on how FERC has used its new authority to root out manipulation in physical electricity and natural gas markets.
To date, FERC has used its new authority to conduct 64 investigations resulting in 14 settlements totaling over $48 million in civil penalties. We have seen the very same energy traders move from Enron to Amaranth, and American families and business alike have the same concerns about potential manipulation in our oil markets.

Last December 2007, Congress granted the FTC anti-manipulation authority in the Energy Bill. Specifically, Congress made it “unlawful for any person … to use or employ … any manipulative or deceptive device or contrivance,” in connection with the purchase or sale of crude oil, gasoline, or petroleum distillates at wholesale.

Americans may be surprised to learn that our oil futures markets were substantially deregulated by CFTC staff decisions that were made behind closed doors. This “London-Loophole” and now the “Dubai-Loophole” is keeping important U.S. energy trading in the dark. And without proper light manipulators have free reign.

[Granni]

We had one energy crisis in the 70's and what has congress done so that we could be energy independent? Nothing! Instead they have let the environmentalists dictate to us and kept us from developing our own resources. They seem to be so worried about what other countries think of us but many of those countries are energy independent. We have oil sources right in our own country and they won't let us drill or build new refineries or develop what we have. Other countries use nuclear energy why can't we?

Why does everyone want to punish and blame the oil companies? They are the only ones doing anything to make it possible for us to have gasoline. Any taxes put on them will just be added to the price. Why should they be developing alternate sources? Would you expect McDonalds to invest in Pizza? Would you want to be taxed heavier or punished because you had a business that was doing well? One of these days we will wake up and find out they have all moved to another country. I wouldn't blame them.

The auto industry has just kept building bigger and more gas guzzling vehicles and we have bought them. Why haven't they tried to develop alternative vehicles?

It comes down to the fact that the congress has failed us and we have all been too stupid to see what was coming. We keep voting idiots into congress and we're still doing it.

[common sense]

At least McCain has an intelligent idea on how to help lower gas prices. If you want gas prices to instantly drop a dollar or two, your dreaming, get over it. Obama's grand idea to tax the large oil companies to "give the money back to the people" is one of the dumbest ideas ever! Does he even understand the basics of economics?! If you raise the taxes for these companies, this causes their cost to go up, and how is it that you think these companies are going to account for this rise? BY RAISING GAS PRICES EVEN MORE!!! these companies arent going to sit back and let Obama take away from their profits