Update to an earlier post.
Clinton Joins McCain on Gas-Tax Holiday; Obama Opposes
Nick Timiraos reports from Pittsburgh on the presidential race.
Policy differences between Barack Obama and Hillary Clinton have been far and few, but a new one emerged on Monday over a proposed gas tax holiday. Obama says he’s against while Clinton says she’s in favor, putting her on the same side as John McCain, who proposed such a holiday last week.
Gas prices could hit $4 this summer, raising the ire of voters and putting pressure on presidential candidates to promise immediate action.
Speaking on Larry King Live on Monday night, Clinton outlined a series of steps to address the issue at the beginning of the show, reflecting the growing importance of pocketbook concerns among voters. “I would also consider a gas tax holiday, if we could make up the lost revenues from the Highway Trust Fund,” she said, without specifying how to make up those lost revenues.
Earlier Monday at a community college in the Philadelphia suburbs, Obama rejected a tax holiday as bad economic policy. “I’ve said I think John McCain’s proposal for a three-month tax holiday is a bad idea,” Obama said, warning consumers that any price cut would be short lived before costs spike back.
“We’re talking about 5 percent of your total cost of gas that you suspend for three months, which might save you a few hundred bucks that then will spike right up,” Obama said. “Now keep in mind that it will save you that if Exxon Mobil doesn’t decide, ‘We’ll just tack on another 5 percent on the current cost.’”
Obama also said that pausing the tax would deprive the federal highway fund of its revenue source for needed infrastructure repairs. But he said he opposed an increase in the gas tax, despite a need for Americans to reduce their dependence on oil.
McCain, the likely Republican nominee, called for Congress to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor day last week. Economists have warned that the benefits of such a holiday are short lived.
McCain may feel more pressure to take steps because voters could hold the Bush administration accountable if gas prices spiral out of control. At a press conference earlier this year, President Bush expressed surprise over how high gas prices had risen.