Senator Dole's Gasoline Tax Cut Goes Nowhere

05/09/96

Reuters reported that after Bob Dole refused to couple a cut to the federal gasoline tax with a raise in the minimum wage on Tuesday, Senate democrats blocked the proposal.

Dole's proposal would have cut the gasoline tax by 4.3 cents per gallon temporarily (until January 1, 1997). Dismissing the proposal as nothing more than presidential politics, democrats tried to couple the bill with a raise in the minimum wage that would make a substantive difference in the lives of the the working poor. The move blocked progress on the gas tax issue.

Dole has been trying to use the temporary repeal of 1993's increase in the gasoline tax to paint himself as something of a populist. The effort hasn't payed off in the polls, however. A new Harris public opinion poll released on Tuesday shows that President Clinton's favor with the voters has widened to 25 points.

The gas tax was introduced in 1993 as part of Clinton's successful drive to cut the nation's budget deficit. Repealing the tax until January 1 will cost the nation $2.9 billion in lost revenue. Dole's proposal would have made up for the lost revenue by cutting Department of Energy administrative costs by $800 million between now and 2002 and by selling off broadcast frequencies to raise another $2.1 billion. These measures would be one time revenue generators, however, and would not allow for repealing the tax past the end of the year.

The White House has estimated that the republicans' original plan to cut the gas tax by 4.3 cents permanently would cost the government between $30 billion and $35 billion over the next seven years. Some republicans have suggested that a permanent cut in gas tax should be paid for by taking money away from the education budget (Representative Dick Armey) or by cutting welfare benefits for immigrants who are in the United States legally (Senator Phill Gramm).

Paul Dever -- The Auto Channel