OBAMA & CLINTON: "I WAS FOR THIS BEFORE I WAS AGAINST THIS!" SOUND FAMILIAR?In a new policy split in the presidential campaign, Barack Obama opposed a federal gas-tax holiday supported by John McCain, the likely Republican nominee. Hillary Clinton said she would be open to the tax break.
Sen. Obama, who voted for a temporary gas-tax break when he was a state senator in Illinois, rejected a federal tax holiday as bad fiscal policy. The federal gas tax raises money to repair and expand the highway system.
In Illinois in 2000, Sen. Obama voted for a six-month, five-percentage point break on the state's 6.25% gas sales tax. The reduction of the tax, which goes into a general revenue fund, passed on a 55-1 vote and included measures designed to ensure that the benefits of the tax break reached consumers. At one point, Sen. Obama jokingly asked on the Senate floor whether it would be possible to install placards on gas-station pumps telling motorists he had helped win temporary price relief.
When some state legislators tried to make the suspension permanent before it expired, Sen. Obama spoke out against that measure but defended his vote for the holiday, according to transcripts posted on the legislature's Web site.
"I originally voted for the suspension because I thought that it was extraordinary circumstances, given the huge hike in prices," he said at the time. Gas prices averaged $1.52 a gallon in March 2000.
Subsequent studies showed the tax did little to save money for consumers. Sen. Obama's campaign has pointed to that failure in rejecting the McCain proposal, which Sen. Obama says doesn't guarantee a benefit for consumers.
Policy differences between Sens. Obama and Clinton have been few, and the debate over gas prices is likely to be a major election concern as rising prices put pressure on politicians to promise relief.
Sen. McCain last week called for Congress to suspend the 18.4-cent federal gas tax and 24.4-cent diesel tax from Memorial Day to Labor Day. The Arizona senator has moved aggressively in recent weeks to rebut Democrats' criticism that he is out of touch with voters' economic concerns.
Earlier Monday at a town-hall forum on economic issues, Sen. Obama rejected the proposal. "I've said I think John McCain's proposal for a three-month tax holiday is a bad idea," Sen. Obama said, warning consumers that any price cut would be short-lived before costs jump again.
Speaking on CNN Monday night, New York's Sen. Clinton outlined a series of steps to address gas prices, including the release of oil from the country's strategic reserves. She said she would "also consider a gas-tax holiday, if we could make up the lost revenues from the Highway Trust Fund," which the federal gas tax supports. She didn't specify how those lost revenues would be recovered.
Economists in general oppose a tax holiday because it would encourage consumption of gasoline at a time of soaring demand.
Billionaire oilman T. Boone Pickens, a longtime Republican donor, criticized Sen. McCain's policy in an interview with The Wall Street Journal and other news organizations last week.
Mr. Pickens said suspending the federal gas tax "sends a signal that we have plenty of gasoline and diesel, and that's not the case."
Since 2000, there have been at least half a dozen attempts by members of Congress to suspend the federal gas tax. All have failed.
In his recent opposition to the holiday, Sen. Obama also cited the loss of federal highway funds for infrastructure repairs. According to a paper circulated on Capitol Hill this month by the U.S. Department of Transportation, 35,000 jobs are created for every $1 billion in federal highway spending.
Sen. Obama, who voted for a temporary gas-tax break when he was a state senator in Illinois, rejected a federal tax holiday as bad fiscal policy. The federal gas tax raises money to repair and expand the highway system.
In Illinois in 2000, Sen. Obama voted for a six-month, five-percentage point break on the state's 6.25% gas sales tax. The reduction of the tax, which goes into a general revenue fund, passed on a 55-1 vote and included measures designed to ensure that the benefits of the tax break reached consumers. At one point, Sen. Obama jokingly asked on the Senate floor whether it would be possible to install placards on gas-station pumps telling motorists he had helped win temporary price relief.
When some state legislators tried to make the suspension permanent before it expired, Sen. Obama spoke out against that measure but defended his vote for the holiday, according to transcripts posted on the legislature's Web site.
"I originally voted for the suspension because I thought that it was extraordinary circumstances, given the huge hike in prices," he said at the time. Gas prices averaged $1.52 a gallon in March 2000.
Subsequent studies showed the tax did little to save money for consumers. Sen. Obama's campaign has pointed to that failure in rejecting the McCain proposal, which Sen. Obama says doesn't guarantee a benefit for consumers.
Policy differences between Sens. Obama and Clinton have been few, and the debate over gas prices is likely to be a major election concern as rising prices put pressure on politicians to promise relief.
Sen. McCain last week called for Congress to suspend the 18.4-cent federal gas tax and 24.4-cent diesel tax from Memorial Day to Labor Day. The Arizona senator has moved aggressively in recent weeks to rebut Democrats' criticism that he is out of touch with voters' economic concerns.
Earlier Monday at a town-hall forum on economic issues, Sen. Obama rejected the proposal. "I've said I think John McCain's proposal for a three-month tax holiday is a bad idea," Sen. Obama said, warning consumers that any price cut would be short-lived before costs jump again.
Speaking on CNN Monday night, New York's Sen. Clinton outlined a series of steps to address gas prices, including the release of oil from the country's strategic reserves. She said she would "also consider a gas-tax holiday, if we could make up the lost revenues from the Highway Trust Fund," which the federal gas tax supports. She didn't specify how those lost revenues would be recovered.
Economists in general oppose a tax holiday because it would encourage consumption of gasoline at a time of soaring demand.
Billionaire oilman T. Boone Pickens, a longtime Republican donor, criticized Sen. McCain's policy in an interview with The Wall Street Journal and other news organizations last week.
Mr. Pickens said suspending the federal gas tax "sends a signal that we have plenty of gasoline and diesel, and that's not the case."
Since 2000, there have been at least half a dozen attempts by members of Congress to suspend the federal gas tax. All have failed.
In his recent opposition to the holiday, Sen. Obama also cited the loss of federal highway funds for infrastructure repairs. According to a paper circulated on Capitol Hill this month by the U.S. Department of Transportation, 35,000 jobs are created for every $1 billion in federal highway spending.
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