Gasoline tax holiday goes nowhere

How does that saying go? The road to the White House is paved with nice sounding policy, not nice sound policy.

Last week, Sen. John McCain, R-Ariz., the Republican candidate for president, announced his plan for a holiday on gasoline and diesel taxes.

He proposed suspending the 18.4 cent federal gasoline tax and 24.4 cent diesel tax from Memorial Day to Labor Day.

McCain believes the cut would save citizens $1.84 for every 10 gallons of gasoline purchased during the period Americans traditionally purchase the most petrol.

It sure sounds good, doesn't it?

Like hiring basketball hall-of-famer Isiah Thomas to coach your team, McCain's tax holiday sounds good until you find out what it means.

McCain's proposal was pushed forward as an amendment in the Senate on Thursday, but was withdrawn before anyone could get a look at the meat of the idea.

If it had gone forward, the fuel holiday would have taken about $9 billion out of the transportation trust fund, money that is used to build and repair the nation's roads, bridges and other transportation infrastructure.

Insiders believe the $9 billion would have to be repaid by plunging the general fund further into debt.

Nevada transportation consultant Tom Skancke, who also served on the National Surface Transportation Policy and Revenue Study Commission, called McCain's proposal "bad policy."

Preliminary numbers worked out by opponents of the proposal said the average American might save $28 over the three-month period.

And that would all depend on the oil companies. Skancke explained that oil companies must prepay the fuel tax and then recoup their money by adding the charge at the pump.

"What do you think is going to happen?" Skancke asked. "The consumer would never see the savings."

Skancke believes the price at the pump would never go down and when the fuel tax was reinstated at the end of the summer, the oil companies would just tack on a new 18.4 cents a gallon.

"The only people who would have come out of this smelling like a rose is big oil," Skancke said. "This would not affect them. They're not going to be good Samaritans."

Besides oil company greed, there's another reason why the price of gasoline wouldn't go down: supply and demand.

Since summertime brings the highest demand for gasoline, lowering the price would encourage more of it to be purchased.

And the more gasoline that's purchased, the higher the price will go.

So that $28 in savings may not even be there at all.

Which is a point one of McCain's fellow senators tried to make. Sen. Harry Reid, D-Nev., has maintained that any cut in the gasoline tax should be covered by ending tax breaks for big oil companies, according to his spokesman Jon Summers.

Plus, "the McCain amendment doesn't guarantee the savings will be passed on to consumers and would further add to the national debt," he wrote in an e-mail.

And just to be sure this isn't a Democrat versus Republican thing, I asked U.S. Secretary of Transportation Mary Peters, a Republican who used to head the Arizona Department of Transportation, for her position on the gasoline tax holiday. Peters is aware of the proposal, but the Bush administration has not made a similar request, a spokesman said.

Not exactly an endorsement. It's barely even an acknowledgement. And that's from a colleague who worked hand in hand on Arizona transportation issues with McCain for years.

So, is this a case of good politics versus bad policy?

McCain is wise enough to know his proposal wouldn't come close to passage in either house of Congress. And if it did, it would wreak havoc on the transportation trust fund that is already near shambles.

Which might mean he and his people think the American electorate is a bunch of lollipops and would easily fall for some sweet-sounding words.

That could be a real turnoff for any undecided voter.

If you have a question, tip or tirade, call the Road Warrior at 387-2904, or e-mail him at roadwarrior@reviewjournal.com or fmccabe@reviewjournal.com. Please include your phone number.