Republicans Suggest Education Cuts Should Pay for Gas Tax Repeal

05/07/96

Dick Armey, Republican Leader of the U.S. House of Representatives has suggested cutting money from the education budget to make up for the revenue that would be lost if the nation's gasoline tax were cut by 4.3 cents per gallon.

Bob Dole, in what is being touted as his "populist" response to the White House's efforts to raise the nation's minimum wage, has suggested that the government should repeal an increase in the federal gasoline tax, which was instituted in 1993.

The Clinton administration reminded Republicans who want to repeal the tax that it would be impossible to balance the budget without somehow making up for the revenue that would be lost with the tax cut. The repeal, in fact, would cost the government somewhere between $30 and $35 billion over the next seven years.

Responding to the President's question about where the money to recoup such a large loss of revenue would come from, republican Rep. Dick Armey suggested that it should come out of education spending. Republican Sen. Phill Gramm suggested that the money should be made up by cutting welfare benefits for legal immigrants to the U.S.

Both Bob Dole and Newt Gingrich have said that the republican idea to cut gas taxes should be tied to any bill that would address raising the country's minimum wage to $5.15 per hour.

The republican idea of repealing 1993's 4.3 cent per gallon increase in gas taxes came just as petrol prices hit a five year high. Republicans seized on the notion of a repeal at the same time that the White House ordered official investigations into the question of why gas prices are so high, in the first place. The repeal idea may be short lived, however, as oil prices have peaked and are beginning to drop again. Last week's prices on Wholesale gasoline fell four cents after President Clinton ordered the sale of 12 million barrels of oil from the nation's strategic petroleum reserve.

Separate news stories have reported that oil industry execs expect prices to return to their former levels. The Chairman of Sun Co. announced that gas prices have peaked, and Exxon's chairman has announced that he thinks that U.S. supplies and demand for oil will come back into balance. High gas prices have been principally blamed on tight supplies and high demand.

Paul Dever -- The Auto Channel