Whatever else John McCain and Hillary Clinton may be, they aren’t stupid. That what makes their campaign-trail calls for a gas-tax “holiday” so disappointing.
The idea is to suspend the 18.5-cent federal gas tax and the 24.4-cent diesel tax from Memorial Day to Labor Day, to give traumatized drivers a well-deserved break from the shocking spikes in the price of gasoline.
That’s the official theory, anyway. In the real world, the holiday would chiefly let McCain and Clinton strike poses as champions of America’s much-put-upon motorists. It wouldn’t do those motorists much good and might actually harm them.
If the holiday were enacted, the average American could save $28 or $30 over the course of the summer – a pittance compared to the total cost he or she is paying for gasoline.
Even those savings might not materialize. The law of supply and demand governs the market, and the supply of American gasoline is presently fixed: Our refineries are running at full capacity.
That means demand will dictate prices. To the extent a lower gas tax stimulates demand, prices would rise accordingly – swallowing up some or most of the savings from the purported holiday.
In the meantime, the holiday would divert an estimated $9 billion from the federal highway trust fund that helps pay for building and repairing the nation’s roads and bridges. The fund is already too strapped to handle the needs. Does anybody think drivers will be better off on roadways suffering $9 billion worth of further neglect?
Beyond that, the loss of the $9 billion could translate into the disappearance of as many as 300,000 highway construction jobs.
That’s quite a price to pay for a political trick that would save – at best – a couple of dollars a fill-up.
Barack Obama has refused to go along with the ruse. Right now, he’s getting slammed by Clinton, who suggests he’s insensitive to the ordinary Joes who must choose “between driving to work and having enough food for their kids.”
But Obama nailed it when he called the holiday a gimmick designed, not to get drivers through the summer, but to get McCain and Clinton through the election.
Shame on them: They both know better.
President Bush administered a cold dose of reality of his own Tuesday when he acknowledged that there’s no quick fix to this year’s gas prices. “If there was a magic wand to wave,” he said, “I’d be waving it.”
In today’s petroleum market, driven by ballooning global demand for oil and gas, magic wands are in short supply. A gas-tax holiday isn’t one of them.