Monday, May 05, 2008

Harkin: Gas Tax Holiday Would Hit Iowa Roads Big Time

U.S. Sen Tom Harkin says Hillary Clinton and John McCain's proposals to temporarily suspend the 18-cent-a-gallon federal gas tax this summer won't earn congressional consideration and are causing some serious eye-rolling among economists -- and serious people for that matter.

Harkin, an Iowa Democrat, has objected to the idea because the proposal would eliminate at least $75 million per quarter – based on 2006 estimates – that the Iowa Department of Transportation gets to use on roads and bridges in the state. In effect, enacting a gas tax moratorium for the summer would amount to a loss of at least $75 million in revenues to rebuild the highways, roads and bridges in Iowa.

"No, Congress will not take it up," Harkin said on a conference call with Iowa Independent and other media.

Harkin said he's not sure the intended savings would even make it back to consumers were the proposal to go anywhere.

"Oil companies might knock off just as nickel," Harkin said. "We're not mandating that evety pump has to reduce its price by 18 cents."

Harkin has called on Congress to address the gas price crisis with substantive action that would provide real relief to American consumers. In the last year, gas prices have skyrocketed from $2.97 to $3.62. Harkin pushed for legislation he co-sponsored which would temporarily halt contributions to the Strategic Petroleum Reserve (SPR) – a supply created in 1975 to keep prices down in the U.S. in the event of a war.

“Why should the federal government be purchasing oil to contribute oil to the strategic reserve for a time of crisis when the time of crisis has arrived? While this is by no means a long term solution, it is something we can do immediately to impact the supply of oil and give consumers some relief at the pump,” said Harkin.

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