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Jewish World Review May 8, 2008 / 3 Iyar 5768 Gas-Tax Holiday a Loser By Debra J. Saunders http://www.JewishWorldReview.com | In a desperate bid to exceed the expectation that she would lose big in North Carolina and win handily in Indiana, Hillary Rodham Clinton glommed onto John McCain's proposal for a summer holiday on the 18.4 cents per gallon federal gasoline tax. With her two-point squeak-by win in Indiana and double-digit loss in the Tar Heel State, it is clear that gambit failed. Barack Obama stood tall in opposing the gas-tax holiday as "an election-year gimmick." And he emerged stronger than predicted. Maybe in 2008, there is such a thing as over-pandering. In April, McCain proposed suspending the federal gasoline tax and the 24.4 cents per gallon diesel tax from Memorial Day to Labor Day. The conservative Wall Street Journal editorial page struck the right note in opining, "There are few tax cuts we don't like, but this one smacks of poll-driven gimmickry." Hmmm. Poll-driven gimmickry. No wonder Clinton jumped on that bus. To make it more poll-driven and gimmicky, she proposed to make up for the $8 billion in lost tax revenue by imposing a windfall tax on Big Bad Oil companies. She then hit her opponent with ads that warned voters that Obama dismissed the savings to consumers as "just pennies. He'd make you keep paying that tax instead of big oil." Pollster Scott Rasmussen reported Wednesday that he found that 46 percent of likely voters nationally favor a summer gas-tax holiday, 42 percent oppose it and 12 percent are not sure. So the idea is marginally popular. And it is hard not to be moved when McCain talks about the pain of working-class people being hosed during long commutes or when Clinton commiserates with families who have to choose between a gallon of gas and a gallon of milk. Thus both McCain and Clinton have been able to use the proposal to establish their populist bona fides while they dismiss their "elite" critics, who can more easily absorb high prices at the gas pump. Here's the problem: Economists don't believe that the gas-tax holiday will produce a commensurate drop in prices at the pump — not when global demand for oil is up and the dollar is weak. Even the New York Times editorialized on the simple supply-and-demand reality: "Gas prices rise during the summer season of heavy driving as rising demand pushes refiners to produce virtually at full capacity. If a suspension in the excise tax reduced the price at the pump, it would encourage even more driving. This would simply push prices back up." The watchdog group factcheck.org wrote in response to a Clinton gas-tax ad, "We and other journalists have tried unsuccessfully to find any economists who think Clinton's holiday will actually give drivers relief." When ABC's George Stephanopoulos asked Clinton to name an economist who supported her idea, Clinton replied that she was "not going to put my lot in with economists." President Bush also opposes the gas-tax holiday. "If there was a magic wand to wave, I'd be waving it, of course," Bush told reporters last week. Reports have faulted Bush's suggested remedies — drilling in the Arctic National Wildlife Refuge, expanding nuclear power — as old ideas. True, expanding supply and reducing demand are old ideas. That work. Of course, the most irritating element of the McCain/Clinton pandering is that both candidates support a spate of laws designed to curb greenhouse gases. Ergo, they should love high gas prices, which prompt Americans to drive less and buy more fuel-efficient cars. Except this is an election year. I should note that while an Obama ad hit Clinton's "political pandering," the same ad touted his pledge to "take on price gouging by oil companies," tax their windfall profits, and give "working families" a $1,000 tax cut. On the one hand, Obama showed political courage in not jumping on the gas-tax holiday bandwagon. On the other hand, his version of not pandering is to promise to whack Big Oil in ways that aren't likely to change anything. And instead of saving "working families" pennies a day, he promised dollars a day. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Comment JWR contributor Debra J. Saunders's column by clicking here. Debra J. Saunders Archives © 2007, Creators Syndicate

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