As long as Congress and its leaders are so unpopular — largely because they can’t get anything done — they ought to do something that will be very unpopular in the short run, but will vindicate them in the long run: raise gasoline taxes. [IMGCAP(1)]
A hefty hike in gas taxes — better yet, in taxes on all carbon-based fuels — will accomplish far more than mandates and subsidies for what everyone claims to want: “energy independence” and “clean energy.”
Carbon taxes would encourage conservation, fuel-efficient cars, development of alternative energy sources — and would provide funds for investment in energy research and infrastructure.
Rebates could be provided to diminish the impact on poor people and taxes could be cut when oil, gas and coal companies develop “clean” technologies.
Sensible though the idea is — and despite evidence that $3 per gallon gas already is causing Americans to move from SUVs to hybrids — gas and carbon taxes have not even been broached in the current energy debate in Congress.
Nor is President Bush or any candidate for his job advocating them, though all say they support freeing the United States from dependency on foreign oil and improving the environment.
It certainly would take courage. The instant reaction of voters to any tax increase is “no.” The last poll I could find on the subject, a New York Times/CBS poll in 2006, showed that 85 percent of voters opposed a gas tax hike.
And yet, 55 percent said they’d support such an increase if it reduced U.S. dependence on foreign oil, and 59 percent said they’d support it if it resulted in less consumption or eased the threat of global warming.
This suggests that real leadership is required from our top politicians. Instead, what they do is pander to their favorite groups — environmentalists and populists for Democrats, anti-environmentalists and energy producers for Republicans — and decry high gasoline prices.
Democrats are accusing oil companies of “gouging” and “profiteering.” Republicans, with more evidence, are blaming increased demand for oil from China and India and a lack of U.S. refinery capacity for high prices.
But neither is telling the truth: that, even with oil at $70 a barrel and gasoline at $3 a gallon, as the U.S. Chamber of Commerce put it in a recent report, “the typical family is not paying more than ever before for energy.”
The report, “Energy Security in the 21st Century: Facts, Choices and Challenges,” the first product of a new chamber project headed by retired NATO commander Gen. James Jones, did not call for higher taxes.
But it did make the point that “energy consumption represented approximately 7 percent of the average household budget between 1990 and 2004, a decrease from 11 percent in the early 1980s.”
And, even at $3 a gallon, the report showed that gasoline in the U.S. is far cheaper than it is elsewhere in the world — $5 in Tokyo and more than $6 in most of Europe, topping out at nearly $7 in Oslo, Norway.
The report was unveiled at a conference June 11 at which the clear message from energy experts was that the U.S. needs to “do it all” to fulfill its future energy needs, diversify sources and “get green” — expand domestic production of oil, gas and coal; remove restrictions on energy production and transmission; promote conservation; advance alternatives; and invest in new technology.
The Chamber of Commerce will issue its own recommendations later this year, but experts at the conference advocated proposals including plug-in hybrid cars, expanded off-shore drilling in America, more nuclear plants, more electricity transmission lines, ethanol derived from agricultural waste, and tidal and thermal power derived from the oceans.
In Congress, instead of promoting do-it-all energy development and finding bipartisan ways to do it, Republicans and Democrats are fighting with each other, promoting their favorite energy nostrums — and getting nowhere.
As one Chamber of Commerce conference presenter put it, “Republicans act as if only wimps advocate renewables and Democrats think that oil, gas and coal is for pigs.”
It should be obvious from the Senate’s tortured progress with immigration reform that the only chance for progress is a bipartisan “grand bargain” developed by leaders such as Sens. Jon Kyl (R-Ariz.) and Edward Kennedy (D-Mass.). Even it could come to naught.
In the case of energy, the Senate has two potential bargainers — Jeff Bingaman (D) and Pete Domenici (R), both from New Mexico. But if Domenici is playing the role of Kyl, Bingaman is not playing Kennedy. Instead, he is advancing a requirement that utilities produce 15 percent of their energy from renewable sources, meaning wind power, primarily.
When Domenici proposed widening the definition of “renewable” to include nuclear and hydro-electric power, it was voted down, primarily by Democrats. Bingaman’s proposal is likely to be filibustered by Republicans.
Meanwhile, Democrats (and some Republicans) in both the House and Senate are proposing to withdraw huge subsidies granted by Republicans to oil, gas and coal companies in 2005 and give them instead to developers of alternative sources, primarily wind. This idea, too, is likely to be blocked.
The result is that the public will look once again with disgust at Congress, whose approval rating in the Gallup Poll stands at 24 percent, even lower than Bush’s dismal 31 percent. The Rasmussen poll put Senate Majority Leader Harry Reid’s (D-Nev.) approval at 19 percent. Speaker Nancy Pelosi (D-Calif.) rated 34 percent in a Newsweek poll.
Admittedly, higher energy taxes would be a hard sell for any Democratic leader. Republicans likely would make their lives miserable. The idea would need bipartisan backing. But it is the right idea and it could be sold as a path to what everybody wants — energy independence and a clean environment.