One of the awkward realities of the Democratic presidential race is that Hillary Clinton and Barack Obama really don’t disagree on much. Their platforms are not identical, but in several key areas, the two Dems are generally on the same page. This, as much as anything, leads the campaign to focus on trivia, mini-scandals, personalities, and process questions like “electability” — because it’s easier than highlighting the relatively few differences between them.
With this in mind, I am absolutely delighted to see a new, genuine, Grade-A policy conflict between the two candidates emerge. It has nothing to do with a gaffe or a flip-flop or guilt by association. It’s an actual disagreement over substance. I think I’m feeling faint.
The issue, in this case, is a proposal for a “gas-tax holiday.” Two weeks ago, John McCain got the ball rolling, with a pitch that sounded like it might have political appeal: over the summer, when fuel demand is at its peak and gas prices are on the rise, McCain wants to shave 18.4 cents off the price of a gallon of gas by temporarily waving federal taxes. It would cost $11 billion a year.
Clinton agrees with McCain, and Obama doesn’t.
As angry truckers encircled the Capitol in a horn-blaring caravan and consumers across the country agonized over $60 fill-ups, the issue of high fuel prices flared on the campaign trail on Monday, sharply dividing the two Democratic candidates.
Senator Hillary Rodham Clinton lined up with Senator John McCain, the presumptive Republican nominee for president, in endorsing a plan to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for the summer travel season. But Senator Barack Obama, Mrs. Clinton’s Democratic rival, spoke out firmly against the proposal, saying it would save consumers little and do nothing to curtail oil consumption and imports.
Now, it’s worth remembering that Clinton and McCain have similar approaches to this, but their plans are not identical. McCain would waive the tax over the summer, and let the Highway Trust Fund suffer with less money. Clinton, in contrast, would impose a new tax on oil companies to make up the difference, so the Highway Trust Fund would be fine. Her approach is obviously more fiscally responsible.
That said, in the broader sense, Clinton and McCain are on one side of this debate, with Obama on the other. In this case, I think the evidence is overwhelming that Obama’s right.
Indeed, I’ve been criticizing McCain for the idea, so it’s only fair that I criticize Clinton for adopting the same idea. A “gas-tax holiday” wouldn’t address the real problem, and might actually make matters worse.
On the face of it, John McCain’s proposal to offer a gasoline tax “holiday” during the summer driving season might sound like a good way to cut gas prices at the busiest time of the year. But economists and energy analysts say it would have little impact on mitigating the rise in gasoline prices. In fact, it could lead to the opposite result.
The federal gasoline tax represents a flat fee of 18.4 cents a gallon nationwide. With gasoline currently averaging $3.39 a gallon, the tax represents a mere 5 percent of today’s pump price. While that’s not trivial, consider that gasoline prices have more than doubled since 2004.
The problem is that lowering gasoline prices at the pump would encourage more consumption. So in the long run, it would push prices up.
“You don’t want to stimulate consumption,” said Lawrence Goldstein, an economist at the Energy Policy Research Foundation. “The signal you want to send is the opposite one. Politicians should say that conservation is where people’s mindset ought to be.”
It’s why I found it especially disappointing that Clinton not only adopted a bad idea, but attacked Obama for failing to adopt a bad idea.
“My opponent, Senator Obama, opposes giving consumers a break,” Clinton said, campaigning in North Carolina. “I understand the American people need some relief.”
For goodness’ sakes, that’s cheap. I suspect the focus groups liked the sound of a “gas-tax holiday” — consumers would likely endorse any idea that sounded like it might save them some money at the pump — but Obama “opposes giving consumers a break”? C’mon, the Clinton campaign is better than this.
Paul Krugman, who has endorsed Clinton’s approach to most issues enthusiastically, criticized the idea just yesterday, calling it a “measure that would, in fact, do little to help consumers, although it would boost oil industry profits.”
Everything about the McCain-Clinton proposal is just a mess. It wouldn’t address the problem at hand; it would encourage consumption instead of conservation; it would boost oil company profits; it pushes a bogus conservative frame (government taxation is partially responsible for high gas prices); and at least under McCain’s version, it would undercut much-needed transportation funds. Ultimately, it’s part of a search for a short-term quick-fix, but in this case, it’s likely to make matters worse, not better.
It’s nice to be arguing about something substantive for a change, though, isn’t it?