POLITICS AT THE PUMP

	May 3, 1996
	Kwame Holman reports from Capitol Hill on how the politicians in Washington are reacting to the recent increases in the price of gas.

KWAME HOLMAN: Gasoline prices nationwide are the highest they've been since the Persian Gulf War. They've risen an average 20 cents a gallon just since February. In an effort to increase supplies and hopefully drive down prices, President Clinton ordered the sale this week of 12 million barrels of oil from the nation's strategic oil reserve. But it's an idea proposed by Senate Majority Leader Bob Dole, the Republican challenger for President, that's getting the most attention. Dole wants to repeal the 4.3 cents a gallon tax on gasoline that was levied in 1993 to help reduce the federal deficit. SEN. ROBERT DOLE, Majority Leader: I think there's always been sort of a gnashing of teeth by people who want to build highways and bridges and others and people who have to pay the tax. They can maybe justify it if it's for construction of highways, bridges, whatever, but it's hard to justify--at least it has been in the past--to increase gas taxes for deficit reduction. And I think therein lies the major problem. KWAME HOLMAN: Dole spoke this morning at a meeting of the Senate Finance Committee. It's unusual for a Senate leader to participate in committee action, but Dole once was Senate Finance Chairman. The gas tax repeal is his idea and there is a presidential campaign underway. SEN. ROBERT DOLE: Some can say it's partisan. Some can say something else about it, but I think we don't need it. I think we can do without it. I think we can offset it, and we ought to get rid of it, and we ought to do it before the summer driving season starts in earnest. KWAME HOLMAN: The Republican-controlled committee called as witnesses representatives of the trucking, bus, train, and air transport industries, all of whom support repealing that portion of the federal gas tax set aside for deficit reduction. THOMAS DONOHOE, American Trucking Association: Consumers would save 6.5 billion dollars per year in fuel taxes. Trucking companies would save $600 a truck. SUSAN PERRY, American Bus Association: A Greyhound's demographic showed that 44 percent of their passengers have annual incomes of $15,000 or under, so it is a major consideration for our constituency and for our companies who are not healthy, to say the least, and in rather precarious financial positions. EDWIN HARPER, Association of American Railroads: There is no justification for expanding fuel taxes beyond their traditional and appropriate application as a user fee. In addition, it is fundamentally unfair to single out the transportation industry to pay for deficit reduction. KWAME HOLMAN: Melvin Sherbert lobbies Congress on behalf of service station dealers and owns two AMOCO stations himself. SEN. WILLIAM ROTH, Chair, Finance Committee: You say that you would pass on the tax benefits to your customers if the 4.3 cents per gallon motor fuel tax was repealed. MELVIN SHERBERT, Service Station Dealers of America: The moment we received it, we would put that on the street, and I think every other dealer would do that. We challenge each other to try to be the most competitive, and every opportunity that we have to reduce the price, we do it. KWAME HOLMAN: It was the Democrats on the Finance Committee who helped push through the 4.3 cents a gallon tax aimed at deficit reduction, and now they don't want it repealed because, they say, it works. SEN. DANIEL PATRICK MOYNIHAN: We did cut the deficit. We cut it in half. We now have a primary surplus for the first time since the 1960's, which is to say outlays are lower than revenues save for debt service. SEN. JOHN BREAUX, (D) Louisiana: I am absolutely convinced that American families and people that we represent are going to be far better off if we can reach a balanced budget in a reasonable time frame. Your industries, your constituents, the American family, everybody will be much better off. Progress is being made now with four years in a row of deficit reduction because people have had the courage to do some things that aren't very pleasant, and this was one of them. But it's working. KWAME HOLMAN: And Senator John Breaux from the oil-producing state of Louisiana says repealing the tax doesn't necessarily mean the savings will show up at the pump. SEN. JOHN BREAUX: Now, Mr. Sherbert, I respect you saying you're going to pass this on but you don't pay the tax. The people at the pipeline, the end of the barge end, when the fuel comes out collect the tax and pay it. They have no obligation to pass it on to you, just as they did not increase their prices when we passed a 4.3 cent tax. KWAME HOLMAN: But Dole insists repealing the gas tax would save consumers nearly $5 billion a year, and he says he's sure Congress will be able to find spending cuts to offset the loss of tax revenue. SEN. BOB DOLE: My view is when it finally comes to a vote, it'll probably be unanimous or almost unanimous. KWAME HOLMAN: And Dole says Congress will get it done by Memorial Day.