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Dream of gas tax holiday faltered over job losses

WASHINGTON -- The political vision of a summer gas tax holiday died a quick death in Congress, losing to a view that federal excise taxes on gasoline and diesel fuel will have to go up if they go anywhere. Despite calls from the presidential campaign trail for a Memorial Day-to-Labor Day tax freeze, lawmakers quickly concluded -- with a prod from the construction industry -- that having $9 billion less to spend on highways could create a pre-election specter of thousands of lost jobs.

Now, lawmakers quietly are talking about raising fuel taxes by a dime from the current 18.4 cents a gallon on gasoline and 24.3 cents on diesel fuel.

With gas prices setting records daily, Republican presidential hopeful John McCain and former Democratic candidate Hillary Rodham Clinton called for a 90-day suspension of the federal fuel tax to give drivers a little relief at the pump. The fuel taxes go into the Highway Trust Fund, which is used for road construction and repair and mass transit.

Clinton suggested making up for the loss by imposing a windfall profit tax on oil companies, an idea that Republicans rejected. McCain said the money could come out of the general Treasury fund, in effect adding to the federal deficit, and is still getting mileage from the idea.

"Some economists don't think much of my gas tax holiday," he said in a speech this month. "But the American people like it, and so do small business owners."

Barack Obama, the likely Democratic nominee, opposed the idea from the beginning and the White House gave it a cold shoulder. Depriving the 52-year-old Highway Trust Fund of $9 billion at a time when it is heading into the red doomed the notion of a gas tax holiday in Congress.

The chairman of the House Transportation and Infrastructure Committee, Rep. James Oberstar, and the chairman of the highway subcommittee, Rep. Peter DeFazio, presented fellow lawmakers with a list of how many jobs and how much money each state would lose. It ranged from $30 million and 1,000 jobs in Vermont to $664 million and 23,000 jobs in California.

(July 20, 2008)

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The following are comments from the readers. In no way do they represent the views of the Hanford Sentinel

taxed to death wrote on Jul 20, 2008 8:44 AM:

" raise it 10c???
We are already being raped at the pumps and now they want a bigger piece of us?? "

Alan G. wrote on Jul 20, 2008 4:54 PM:

" Driving on California highways, you'd never know there was a Highway Trust Fund. The money must be spent somewhere else because it certainly isn't here. I sure hope they're happy in Alabama or wherever else they're spending the money. "

catch- wrote on Jul 20, 2008 8:53 PM:

" this is a catch 22. While it would be nice to have the tax break, I do really want to be able to drive on drivable roads. On the same token, if they raise gas prices by 10 cents a gallon, then costs go up, and revenue will go down that much more because people will cut back on their driving as much as possible. Busses and trains around here can only handle so much and go so far. "

dose wrote on Jul 21, 2008 11:26 AM:

" Well I don't know what roads everyone are driving on that are so bad. but compared to Alaska, Colorado, and Ohio California roads are about the best I've ever seen. "




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