Clinton, McCain and Obama Address Rising Gas Prices as the North Carolina Primary Nears

This phrase was the central part of Bill Clinton's successful campaign for President in 1992. And what was true 16 years ago still carries weight today. For average consumers the most pressing economic issue is the skyrocketing price of gas. Here in North Carolina, the average price of a gallon of gas is $3.59, which may sound cheap to people in San Francisco, yet is still up nearly 70 cents a gallon from a year ago.

No surprise, each of the three remaining presidential candidates has their thoughts on how to ease the gas crisis for voters. Here is the basic outline of each candidate's plans to win the heart of voters by appealing to their pocketbook.

John McCain

Republican nominee John McCain has called on Congress to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. Additionally, McCain seeks to lower demand on oil by stop filling the Strategic Petroleum Reserve. Finally, McCain wants to end policies that contribute to higher transportation and food costs, such as ethanol subsidies, tariff barriers and sugar quotas.

Is this good for the consumer and good for the country?

Slicing over 18 cents per gallon from the price of gas will certainly help consumers in the short run. But since the government is already running at a deficit, how will it handle this substantial loss of revenue? Gas taxes typically go to maintaining roads and highways in the country and there are already wide scale reports of our nation's crumbling infrastructure. And what is going to be the effect on the consumer psyche and the nation's spending when in early September gas prices jump back up 18 cents a gallon? And this jump will happen right before the election in November. McCain's heart seems to be in the right place, but this seems like bad policy all the way around.

Hillary Clinton
Like McCain, Democratic hopeful Hillary Clinton also wants to reduce the federal gas tax. But she would make up the lost taxes by imposing a windfall profits tax on oil companies. Clinton mirrors another McCain proposal by calling for an end to new additions to the Strategic Petroleum Reserve. She also calls for closing tax loopholes and using the funds to aid low-income families to pay energy bills. Clinton wants to pressure OPEC nations to increase production by filing a WTO complaint and to crack down on speculation by energy traders and market manipulation in oil and gas markets that are driving up the price of oil.

Is this good for the consumer and good for the country?

Again, a temporary decrease in the price of gasoline (which may not even be noticeable, if prices continue to rise at their current pace) seems like a band-aid solution at best. At least Clinton is trying to recoup the lost revenue, although it's far from certain that a windfall profits tax would actually fly in Congress. I think the same reasoning applies to closing the alleged tax loopholes to raise money for poor families. And filing a WTO complaint seems like the textbook definition of beating someone with a wet noodle. But cracking down on speculators in the energy markets seems like an excellent idea. We all saw first hand with the Enron crisis the impact that the energy traders could have on prices. The Clinton campaign claims that speculators could be causing a $20 or more per gallon increase in the price of oil.

Barack Obama

Democratic hopeful Barack Obama wants to encourage biofuels and technologies that will limit the nation's dependence on foreign oil. Additionally, he wants to double fuel economy standards within 18 years. Finally, he wants to establish a national goal of improving new building efficiency by 50 percent and existing building efficiency by 25 percent over the next decade.

Is this good for the consumer and good for the country?

Obama's plan does not give consumers an immediate break at the pump like his two competitors. But his insistence on alternative fuels and increased efficiency will benefit both consumers and the nation at large in the long term. Obamba backs Cellulosic Ethanol, which could potentially reduce greenhouse gases by 85 percent over reformulated gasoline, depending on the production processes used. Currently, we do not harvest cellulose, since it cannot be digested by humans. So, using cellulose for fuel will not compete with the production of food. According to Wikipedia, "323 million tons of cellulose containing raw materials that could be used to create ethanol are thrown away each year."

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Each of the presidential hopefuls wants to appeal to swing voters any way possible. All three candidates have come up with proposals to help combat the rising cost of gasoline and oil. But Obama's commitment to alternative fuels sets him apart from his competitors, whose main focus seems to be giving consumers a temporary price break.

Sources:

John McCain for President: McCain Economic Plan

Hillary for President: North Carolina: Hillary Clinton's Plan to Address Soaring Prices at the Pump

Obama '08: Energy & Environment

Wikipedia: Cellulosic Ethanol