New York Times Editorial - Gas madness in Congress
New York Times Editorial - Gas madness in Congress
Copyright by The New York Times
FRIDAY, APRIL 28, 2006
The battle to see which U.S. political party can out- pander the other on the subject of gasoline prices is embarrassing. If American consumers are having sticker shock at the pumps, it's because of a series of policy failures that stretch back decades. The last thing the United States needs now is another irresponsible quick fix.
Senate Republicans have proposed to assuage the pain of high gas prices by sending many taxpayers $100 apiece - enough for about two tanks of gas. Meanwhile, a cadre of Senate Democrats is carrying on about a temporary suspension of the federal gas tax, which is 18.4 cents per gallon, the same level it was in 1993. At best, the suspension would temporarily reduce prices, causing car owners to drive a little more. That rise in demand would send prices back up again.
Lawmakers from both houses and parties are calling for investigations into any price gouging or other rip- offs by oil companies and filling stations. It's perfectly all right to look into these things, but no one imagines that the result will be much more than a series of photo-ops.
Suspending environmental safeguards - as President George W. Bush proposed in his energy speech this week - might send prices down a bit, at the price of dirtier air. It's appalling that a generation after the first oil shock, in 1973, politicians are still reacting with such hysteria.
The main problem is not environmental regulations or even rapacious oil companies. Americans' outsized demand for oil and gasoline pushes up prices, and now that the economies of huge countries like China and India have taken off, there will continue to be more competition for the world's available oil. There are policy solutions for the problem of excess demand, chief among them higher fuel economy standards. But more than five years into the Bush administration, there has been only a minuscule increase in mileage standards for SUVs and no increase for cars.
The oil companies' mind-boggling profits have brought calls for a windfall profits tax. It would not be too difficult to set up a system that would capture a percentage of the companies' extraordinary profits, and the money could be used for long-term solutions, like research into alternate fuels and mass transit. That would be fair. Oil companies are indeed profiting from events that have little to do with their efforts. If some of those profits were taxed and flowed into the public treasury, the money could go toward public purposes.
But critics who say such a tax discourages investment in exploration and drilling have a point. Though they invariably overstate their case, their opposition would make a windfall tax a heavy lift politically, thereby draining effort from other, more direct, solutions, like better mileage standards and ultimately - the hardest sell of all - a bolstered federal gas tax to encourage conservation.
The frantic gestures by Congress this week are, at bottom, an attempt to divert attention from its past failures to act, and its resulting inability to shield Americans from the burden of high prices at the pump. But the pain of high gas prices will only get worse unless Congress changes its priorities, now.
Copyright by The New York Times
FRIDAY, APRIL 28, 2006
The battle to see which U.S. political party can out- pander the other on the subject of gasoline prices is embarrassing. If American consumers are having sticker shock at the pumps, it's because of a series of policy failures that stretch back decades. The last thing the United States needs now is another irresponsible quick fix.
Senate Republicans have proposed to assuage the pain of high gas prices by sending many taxpayers $100 apiece - enough for about two tanks of gas. Meanwhile, a cadre of Senate Democrats is carrying on about a temporary suspension of the federal gas tax, which is 18.4 cents per gallon, the same level it was in 1993. At best, the suspension would temporarily reduce prices, causing car owners to drive a little more. That rise in demand would send prices back up again.
Lawmakers from both houses and parties are calling for investigations into any price gouging or other rip- offs by oil companies and filling stations. It's perfectly all right to look into these things, but no one imagines that the result will be much more than a series of photo-ops.
Suspending environmental safeguards - as President George W. Bush proposed in his energy speech this week - might send prices down a bit, at the price of dirtier air. It's appalling that a generation after the first oil shock, in 1973, politicians are still reacting with such hysteria.
The main problem is not environmental regulations or even rapacious oil companies. Americans' outsized demand for oil and gasoline pushes up prices, and now that the economies of huge countries like China and India have taken off, there will continue to be more competition for the world's available oil. There are policy solutions for the problem of excess demand, chief among them higher fuel economy standards. But more than five years into the Bush administration, there has been only a minuscule increase in mileage standards for SUVs and no increase for cars.
The oil companies' mind-boggling profits have brought calls for a windfall profits tax. It would not be too difficult to set up a system that would capture a percentage of the companies' extraordinary profits, and the money could be used for long-term solutions, like research into alternate fuels and mass transit. That would be fair. Oil companies are indeed profiting from events that have little to do with their efforts. If some of those profits were taxed and flowed into the public treasury, the money could go toward public purposes.
But critics who say such a tax discourages investment in exploration and drilling have a point. Though they invariably overstate their case, their opposition would make a windfall tax a heavy lift politically, thereby draining effort from other, more direct, solutions, like better mileage standards and ultimately - the hardest sell of all - a bolstered federal gas tax to encourage conservation.
The frantic gestures by Congress this week are, at bottom, an attempt to divert attention from its past failures to act, and its resulting inability to shield Americans from the burden of high prices at the pump. But the pain of high gas prices will only get worse unless Congress changes its priorities, now.
posted by Carlos T Mock at 7:32 AM
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