Gas tax puts Clinton and Dole in overdrive Measure's repeal becomes fast cause in election year

THE BALTIMORE SUN

WASHINGTON -- In a stunningly swift display of election-year gamesmanship, President Clinton and his likely GOP rival Bob Dole are on the verge of delivering a gas tax cut that voters didn't ask for and may not notice.

"Is this dumb or dumber?" said Martha Phillips of the Concord Coalition, which lobbies to eliminate the deficit. "After spending nearly a year trying to get a balanced budget deal, they turn around and hand out money to people who haven't asked for it. I guess you'd call it an electoral emergency."

Both presidential contenders, fully engaged in their battle for the White House this fall, have their sights trained on vote-rich California, where rising gasoline prices are particularly noticeable.

Clinton agreed last week to at least suspend for the remainder of this year his own 4.3 cent per gallon tax increase -- an idea that seemed to be plucked from nowhere just 12 days earlier by Dole, the Senate majority leader.

"I have never seen a tax cut proposal move with such speed across the political horizon, and to encounter almost no opposition except for a few grumbles," said David Keating of the National Taxpayers Union, which favors any form of tax cut but preferred another target.

The Dole proposal was developed just hours after GOP leadership aides began circulating a USA Today article reporting that service stations were charging $2 a gallon for high test in California, a 24 percent increase in one month.

At the time, regular unleaded was averaging $1.27 a gallon nationally, up 7 cents a gallon from two weeks earlier.

But economists argue that the recent price surge has nothing to do with the gasoline tax: They say it was mostly a temporary shortage aggravated in California by new anti-pollution laws. They also say that repealing the tax offers scant relief to motorists.

"I'm not sure that in the end anyone will notice a tax cut of 4.3 cents when there's been an increase of 40 cents to 50 cents a gallon," said Naba Eissa, an assistant professor of economics at the University of California at Berkeley.

What's more, gasoline prices are headed down, as increased refinery production eases shortages caused by the severe winter and low inventories of crude oil.

"I think we can safely say the worst of the price spike is over," said Michael Morrissey, a spokesman for the Automobile Association of America, which conducts surveys of gasoline prices.

And yet, as the pulse of the presidential campaign quickens, Clinton and Dole seem to be turning their backs on the deficit-fighting crusade that has been a top priority in recent years.

To make up for $2.5 billion in revenue that would be lost from repealing the gas tax through the end of this year, Dole wants to draw upon savings that had been set aside for the GOP plan to balance the budget by 2002 -- the party's grandest goal.

If the gas tax was repealed -- as Dole initially suggested -- it would cost nearly $34 billion over seven years.

Clinton's reversal is sharper. In repealing the increase he lobbied furiously for three years ago, Clinton would be jettisoning a key element of the deficit-reduction package he calls the proudest achievement of his presidency.

"At a time when everyone is professing to want to balance the budget, we're turning around to repeal the gas tax that a lot of us fought long and hard for -- without any help from Republicans -- to put into effect," said Sen. James Exon, a Nebraska Democrat. "I think it's political on the part of Bob Dole, and I think it's political on the part of Bill Clinton. And I think it's wrong."

For the moment, the repeal proposal is mired in a parliamentary tangle in the Senate. Clinton and the Democrats are trying to link it with the passage of an increase in the minimum wage.

But Dole says he's determined to get the rollback through by Memorial Day, and Democrats -- just as eager as the GOP leader to be seen granting voters some tax relief -- are offering no real resistance.

"Look, people out there are strapped," said House Minority Leader Richard A. Gephardt of Missouri. "When they see a 25 percent increase at the gas pump, you bet it hurts them."

A sampling Friday of motorists at the Chesapeake Exxon station in Annapolis confirmed Mr. Gephardt's observation: They were eager to accept whatever relief might come their way.

"In this day and age, when the cost of everything is so high, we'll take whatever we can get," said Jeannie Hoflich, who switched from premium to regular gasoline when the per gallon price of high test rose to $1.52 from the $1.31 she had paid a few weeks before.

Larry Petrella, the station manager, said there was no guarantee a tax cut would be passed on. "People need to make a living," he said of station owners.

Even so, the gas tax proposal certainly gave the seemingly stalled Dole campaign a spark.

Dole said the idea had been "floating around for a few weeks" but it took root April 25, the day of the USA Today article.

"The first I learned that there was a big price increase was the morning I saw that headline," said Tony Blankley, House Speaker Newt Gingrich's press secretary.

Later that day, Sen. Phil Gramm of Texas, according to his press aide, pulled Dole aside in the Senate GOP cloakroom and suggested he take the lead on repeal.

That same day, Dole and Gingrich met in the majority leader's office and discussed a repeal.

The next day, Dole gave reporters a copy of a letter he was sending to Clinton that urged the president to back repeal of what he called the "Clinton gas tax hike."

Clinton's announcement that he would sign the repeal if it can be linked to a minimum wage increase knocks the wind out of Democrats who prefer to resist.

"I wish the president would veto the bill," West Virginia Democrat Robert C. Byrd told his Senate colleagues Thursday. "This is pure political pandering, and both sides are engaged in it."

Pub Date: 5/12/96

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