Nethaway: Obama less wrong on gas tax issue

WACO, Texas — Sen. John McCain kicked it off.

Sen. Hillary Rodham Clinton joined in.

Sen. Barack Obama refused to get on board.

Now McCain and Clinton hope that the voters will punish Obama, the unity candidate, for his failure to unify behind their promises to cut gasoline taxes.

Actually, all three presidential candidates are wrong on this issue. Obama is less wrong.

McCain and Clinton believe voters support political candidates who promise campaign gifts the way beads are tossed to onlookers in Mardi Gras parades.

While McCain and Clinton chose to treat voters like children on the issue of gasoline prices, Obama made a riskier choice.

Obama decided to treat voters like adults by denouncing the idea of a temporary suspension of the federal gasoline tax as nothing more than an election year gimmick.

In rejecting the call to support a gasoline tax holiday from Memorial Day to Labor Day, Obama said the temporary gasoline tax suspension only saves the average family about $30 for the entire summer or "30 cents a day, which is less than you can buy a cup of coffee for at a 7-Eleven."

Coupled with the loss of about $8.5 billion to the Highway Trust Fund, which already suffers from a $3.2 billion shortfall, Obama said the gas tax cut is a bad idea.

Obama is right that the other two presidential candidates are wrong to urge Congress to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax over the summer months.

Obama also is wrong, however, about the savings American drivers would experience if Congress approved the gas-tax holiday.

The reason gasoline prices are so high right now is because the price of crude oil keeps hitting record levels due to a number of factors that can be boiled down to supply and demand for oil on the global marketplace.

Another reason gasoline prices always go up this time of year is because America's limited number of old refineries work at maximum production levels to meet the extra demand for summer vacation driving.

If McCain and Clinton got their way, any drop in gasoline prices would immediately increase demand for gasoline, which already is in short supply due to full capacity at U.S. refineries.

Any increase in demand while supplies are short will result in higher prices at the pump.

In other words, the $30 per family summer savings Obama mentioned would never be realized because the increased demand caused by lower prices will result in higher prices.

While the consumers would realize little or no savings from the gas-holiday proposal, the American Association of State Highway and Transportation Officials estimates that the $8.5 billion diverted from the Highway Trust Fund due to a federal tax suspension would result in the loss of hundreds of thousands of jobs.

According to the association, every $1 billion in highway trust money supports 33,000 jobs. More than 280,000 jobs would be lost, according to this estimate, if the federal gasoline tax were suspended this summer.

McCain proposes to make up for the lost tax money out of general revenue, which would add to the nation's huge budget deficit. It would still be paid for in tax dollars.

Clinton proposes to make up the difference by taking it out of the hide of the oil companies, which, as was demonstrated in the early 1980s, results in less money spent finding new supplies and higher gasoline prices.

There's nothing good to say about the McCain-Clinton proposal to cut the federal gas tax this summer.

The United States needs to increase supplies and lower demand. This can be accomplished through conservation, encouraging more oil exploration, building more refineries and raising taxes on gasoline and diesel to encourage less driving, more fuel efficient vehicles and the use of alternative fuels.

Don't hold your breath waiting for a politician to support these measures.

Rowland Nethaway writes for the Waco Tribune-Herald.