NASHUA, N.H. -- The political fight over the issue of fuel prices escalated late last week when Republican presidential candidate Senator John McCain took Democratic presidential candidate Sen. Barack Obama to task for saying that he would have preferred a more "gradual adjustment" in gasoline price increases, said Fox News. "Let me say that Senator Obama said yesterday…he didn't seem to mind the cost increase, it was just a little too quick," McCain told supporters at a Granite State town hall meeting. "Well, a lot of Americans mind."
Asked by CNBC if higher gas prices could help [image-nocss] the U.S. become more energy efficient, Obama said, "I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing." (Click hereto view Obama's remarks. For a longer version, click here.)
Republicans have been critical of Obama for the comments, arguing that the Illinois Democrat lacks sympathy for the plight of average Americans who are now paying more than $4 a gallon to fill up their tanks. "I think I'd like to point out that Senator McCain is not out of touch with the pressure on gasoline prices," McCain adviser Doug Holtz-Eakin said a conference call today. "He proposed a gas tax suspension for the summer that would put $600 in the pocket of a trucker buying diesel fuel, take some of the pressure off the price increases of all the things that they deliver, help American families get through the summer."
McCain is proposing a gasoline tax holiday that would suspend the federal tax of 18.4 cents per gallon; Democratic rival Barack Obama dismisses it as a gimmick. Critics say that cutting the price would only increase demand, which would lead to higher prices again.
The Obama campaign is arguing that the GOP is taking his words out of context. "This attack is ridiculous, and all it shows is how John McCain's allies in Washington are trying to distract voters from the fact that…they voted again to protect Big Oil's profits while we're paying record prices…. No amount of partisan political attacks will change the fact that George Bush, John McCain, and their congressional allies have repeatedly stood with the oil and gas companies and against American consumers," Obama spokesperson Jen Psaki said yesterday, according to the report.
Last week, Senate Republicans blocked a proposal that would have taxed windfall profits of the largest oil companies and allowed the government to take OPEC members to court, said the Associated Press.
The Democratic energy package would have imposed a 25% tax on any "unreasonable" profits of the five largest U.S. oil companies, which together made $36 billion during the first three months of the year. It also would have given the federal government more power to address oil market speculation that the bill's supporters argue has added to the crude oil price surge. Republicans, however, have said the bill would do nothing to ease soaring gasoline prices in the United States.
The Democrats failed, 51-43, to get the 60 votes needed to overcome a Republican filibuster—a procedural tactic to delay debate on a bill—and bring the energy package up for consideration.The defeat affords Democrats another opportunity, going into the November congressional and presidential elections, to try to cast Republicans as siding with the oil companies at a time of record gasoline prices.
Republican leaders said the Democrats' plan would do harm rather than good—and they kept the legislation from being brought up for debate and amendments. Republicans argued that little was to be gained by imposing new taxes on the five U.S. oil giants: Exxon Mobil Corp., Chevron Corp., Shell Oil Co., BP America Inc. and ConocoPhillips Co. While these companies may be huge, they do not set world oil prices and raising their taxes would discourage domestic oil production, the Republicans said of the Democrats' plan.
Republican leader Mitch McConnell of Kentucky called the Democratic proposal "a gimmick" that would not lower gasoline prices and only hold back domestic oil production. "The American people are clamoring for relief at the pump," agreed Republican Sen. Pete Domenici, but "they will get exactly what they don't want" under the Democrats' plan—higher prices and an increase in oil imports.
The bill's supporters argued that their proposal was different from the windfall profits taxes of the early 1980s that thwarted domestic production and led to a rise in imports. The oil companies could avoid the tax by using their "windfall" to push alternative energy programs or refinery expansions, they said.
Obama, in a statement, said Republicans had "turned a blind eye to the plight of America's working families" by refusing to take up the energy legislation. Obama has supported additional taxes on the oil companies. McCain is opposed to such taxes and has proposed across-the-aboard tax reductions for industry as a way to help the economy.
In a statement, the American Petroleum Institute (API) said, "History has proven that windfall profits taxes do not work. The Congressional Research Service concluded that between 1980 and 1986, the windfall profits tax reduced domestic oil production by as much as 1.26 billion barrels, and increased U.S. reliance on imported oil by as much as 13%. Imposing new taxes on the U.S. oil and natural gas industry will not help provide the stable supplies of energy necessary to meet the growing energy needs of American consumers or provide jobs for American workers. Instead, these taxes could reduce our nation's energy security by discouraging new domestic oil and gas production, discouraging new investments in refinery capacity, and actually tilting the competitive playing field for global energy resources against U.S.-based oil and natural gas companies. Moreover, new taxes—of any kind—are particularly detrimental during a slowing economy. Americans would be better served if our elected leaders made real, long-term energy policy instead of promoting old ideas that have failed to secure our energy future. Increasing access to our resources could make us more secure at home, generate more American jobs and put millions of dollars into federal and state coffers."
Click hereto review Obama's energy policy.
Click herefor John McCain's press release on Obama's energy policy.
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