Political Wrangling Over Repeal of Gas Tax

05/02/96

High gas prices have given Washington lawmakers something to grandstand about. President Clinton has ordered the sale of 12 million barrels of crude oil from the nation's strategic petroleum reserves, while Senator Dole and other republicans in Congress have called for a temporary repeal of the 4.3 cent per gallon gasoline tax increase that went into effect in 1993.

Clinton's republican critics have been quick to point out that his plan to sell oil from reserve is principally symbolic, as U.S. refineries generally use crude oil at a rate of about 18 million barrels a day--more than the total number of barrels the President will sell. Critics notwithstanding, prices for oil and gas tumbled on the NY Mercantile Exchange after the President's announcement.

Critics of the republicans point out that the proposal to temporarily scrap the gas tax increase will cost the government $24.8 billion in revenue by the year 2,002: that's a big chunk of money to throw out the window when congress is trying balance the budget. Republicans have made no effort to suggest how that much money could be trimmed from the budget.

Additionally, Tom Dachsle, the Senate's top democrat, pointed out that eliminating 1993's gas tax increase could not be considered a cure for high prices as the tax could not be correlated with the recent rise in gas prices. Dachsle pointed out that the gas tax has been in place and remained constant since 1993, while the rise in gas prices has occurred mostly since January of this year.

"It isn't the tax increase that generated those high costs," said Dachsle, "it's profits going into the pockets of the oil companies all through this country."

Paul Dever -- The Auto Channel