Real gas-tax solutions

One is touched by the concern on the faces of the Republican and Democratic presidential hopefuls as they contemplate ways of dealing with high gas prices.

Sens. Hillary Rodham Clinton (D-N.Y.) and John McCain (R-Ariz.) would suspend the federal retail gas tax at least for the summer while Sen. Barack Obama (D-Ill.), less interested in transitory populism, can’t bring himself to even consider cutting or suspending a tax lest it become habit but can hardly wait to go after “Big Oil.”

Now, I’m one who supports anything that even looks like a tax cut, but these folks must think Americans are fools if they believe endorsing temporary fixes that aren’t likely to ever be enacted for chronic problems will win them either lasting support or the gratitude of a long-suffering public.

Sen. Obama ridicules Clinton’s support for a suspension because, as he rightly observes, Congress isn’t going to pass it. House Speaker Nancy Pelosi (D-Calif.) doesn’t pretend to be either a populist or friend of the average American and rejects the idea out of hand. When pressed on how she expects to get her colleagues in the House and Senate to go along with a tax holiday, the senator from New York begins to sound even more vapid than normal.

The problem, of course, is that she and the other two are more interested in press releases and pronouncements putting themselves on the “side” of the voters they hope to attract than in doing anything to deal with the problem that troubles those very voters.

A tax holiday might make some sense as temporary relief if it were included in a larger package of short-, medium- and long-term proposals to deal with the energy problem. Ah, but didn’t Congress already pass what its leaders liked to describe as a “comprehensive” energy bill? The answer to that question is yes and no.

Congress did indeed pass such a bill, but the bill did virtually nothing to deal with the problem they are now calling a crisis. Indeed, in today’s poll-driven political world, Congress passed its “energy bill” not so much to solve the problem, but to convince people demanding action on dwindling supplies that, with respect to our reliance on foreign oil and steadily increasing energy prices, something was being done. The bill they passed will do something, all right — it’ll ultimately make matters worse.

Americans are today paying at the gas pump the predictable price for policies that have discouraged domestic petroleum production and the development of realistic nuclear and coal-based alternatives in favor of the sun, the wind and corn.

The federal gas tax adds something like 18 cents to the price of a gallon of gas, but blending requirements and the ethanol mandate are far costlier — and their repeal or suspension could pay larger and more immediate dividends at the pump.

We badly need a realistic energy policy that encourages domestic drilling for oil and creates an environment stimulating investment in new refineries, nuclear power and new coal technology rather than forcing us to put all our eggs in the boutique renewable basket, but in the interim there are more sensible ways to cut prices at the pump than a simple temporary suspension of the gas tax.

A year ago, I wrote that the ethanol craze was going to force corn and other agricultural commodity prices through the roof while driving up both gasoline and food prices. When I wrote that column, corn was headed toward $3 or $4 a bushel and experts are now telling us it could go as high as $8 a bushel next year. The increased demand for corn as a fuel stock has driven the price so high that ethanol itself is now, in spite of a 51-cent-a-gallon subsidy at the refining level, uneconomic as an alternative to gasoline.

Indeed, it is estimated that when the current mandate went into effect, it resulted in a 50-cent increase at the pump in addition to the subsidy to the refiner and the unseen tax everyone is forced to pay in the form of higher and higher food costs. It’s a good deal if you’re raising corn, but not if you raise chickens or beef and dairy cattle, and it’s a terrible deal if you have to eat every day.

Sen. Kay Bailey Hutchison (R-Texas), House Majority Leader Steny Hoyer (D-Md.) and others in both parties are proposing that we reduce the ethanol subsidy and end, suspend or lower the mandate. Doing so would do more for those of us who drive and eat than tinkering with the gas tax alone and might actually force legislators to realize that miracle cures to real problems are no substitute for making hard, realistic choices.

Keene, chairman of the American Conservative Union, can be reached at Keeneacu@aol.com.