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John Fout
Consumers have been increasingly hit hard in the pocketbook by soaring prices for gas at the pump. News Monday added to the gloom. Crude oil prices reached record highs, continuing the climb toward $120 a barrel, and AAA reported the national average price paid at the pump was $3.603 a gallon -- also a record high.
Sen. Hillary Clinton (D., N.Y.) capitalized on this pain Monday by unveiling a new policy proposal. Clinton, like Sen. John McCain (R., Ariz.), wants a gas tax break for consumers, in addition to other measures aimed at popping the speculative bubble in the oil markets. Clinton's proposal differs from McCain's. McCain wants to suspend the federal gas tax and stop purchases to the Strategic Petroleum Reserve (SPR) during the summer. Clinton wants to suspend the gas tax, but she plans to pay for it by slamming big oil companies with a windfall tax. Clinton would use the windfall tax to ensure that the Highway Trust Fund continues to receive funds earmarked for repairs. Those taxes appeared to be aimed at producers like Exxon Mobil (XOM Quote), Conoco (COP Quote), BP (BP Quote) and Chevron (CVX Quote). It's not clear whether it targets refiners -- like Tesoro(TSO Quote) and Valero(VLO Quote) -- who have fared worse than producers. Furthermore, Clinton would close $7.5 billion in oil and gas loopholes and use that money to help lower-income families pay gas and grocery bills. Clinton's plan also includes the SPR but entails more aggressive government intervention. Not only does she want to stop purchases for the reserve, but she also recommends releasing oil from the reserve to mitigate market volatility when the market faces short supply.
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