Energy Regulation May Increase
Clinton team plans could raise gas tax, mileage standards, or oil import fees
DRIVING your car and heating your home could get more expensive under President-elect Clinton.
In coming months, the Clinton White House is expected to propose ambitious energy policies that would be designed to save fuel, improve national security, and protect the environment.
The price tag: billions of dollars.
Among the early ideas being floated by Clinton advisers as well as energy experts in the Democratic Congress are:
Higher gasoline taxes. A boost of 15 to 20 cents a gallon would bring in $15 billion to $20 billion a year. The funds could go toward new roads and bridges, mass transit, or toward the budget deficit.
Oil import fees. A levy of $5 a barrel would raise prices for all petroleum products. It would also help oil producers in the United States by putting a floor under prices, and would improve the environment by reducing the amount of oil that is burned.
Increased CAFE standards. Automakers currently must manufacture cars that attain a Corporate Average Fuel Economy (CAFE) of 27.5 miles per gallon. During the presidential campaign, Mr. Clinton supported an increase in CAFE to 40 m.p.g. by 2000, and 45 m.p.g. by 2015.
Senate Democrats say new CAFE standards have the best chance of passage. But they say that Clinton's CAFE targets may be too ambitious. Instead of 40 miles per gallon in 2000, they suggest 34 or 35 m.p.g. Otherwise, financially strapped American auto companies, which can take up to 10 years to redesign their cars, might have trouble meeting a 40 m.p.g. standard. That could throw more Americans out of work, and aid the more nimble Japanese companies like Toyota and Honda.
Ron DeFore, a spokesman for Coalition for Vehicle Choice, which opposes higher CAFE standards, also warns that boosting mileage requirements would result in cars that are smaller and less safe. And it would add approximately $2,750 to the cost of an auto, he predicts.
The gas tax could have tougher sledding in Congress. Candidate Clinton vowed to oppose any increase in what he termed the "backbreaking federal gas tax." His advisers, however, see higher gasoline taxes as a quick source of revenue.
Senate majority leader George Mitchell (D) of Maine is flatly against a new gas tax, but House Speaker Thomas Foley (D) of Washington is for it. So it could be a standoff on Capitol Hill.
Senator Mitchell worries that higher taxes this year could cripple the economy, though he told one interviewer: "I think over time, an increase in the gasoline tax makes sense from an energy, a national security, and a revenue point of view."
The third option, an oil import fee, could be combined with a steeper gas tax as both a revenue and environmental measure. It would hit homeowners who heat with oil, and some manufacturers. But it would force those who don't drive to share the sacrifice.
Conservationists see marginal benefits in all this, but say that a tax rise of "only" 20 cents a gallon won't have a big impact. They would prefer a step-by-step rise of 50 cents.
"A 20-cent increase in the gas tax is insignificant from an energy conservation point of view," says John DeCicco, a research associate with the American Council for an Energy-Efficient Economy. "It could raise significant dollars, but we don't really consider something that small to be of consequence."
At best, Dr. DeCicco estimates a 20-cent tax could save 300,000 barrels of oil a day, or approximately 2 percent of daily US consumption.
Various studies indicate a 20-cent tax on gasoline would cost the typical household about $200 a year.
A gas tax would have its greatest impact on working families, especially those in far-out suburbs who commute hundreds of miles every week, and those who live in rural areas. Democrats on Capitol Hill say steeper gas taxes could be offset for low-income drivers in several ways, including tax credits or cuts in social security taxes.
Joseph Lastelic, a spokesman for the American Petroleum Institute, points out that the two Clinton nominees for the Office of Management and Budget, Leon Panetta and Alice Rivlin, both favor steeper gas taxes. It is a "serious concern" for the oil industry, he says.
"Using the gas tax to reduce the deficit is unfair," he says. "It is regressive. It hurts those in areas where they have to drive long distances.... We do not believe the federal debt should be paid based on how many miles you drive."
Lastelic notes that the gas tax was already raised, from 9.1 cents per gallon to 14.1 cents per gallon, in December 1990.
He observes: "Of that, 2.5 cents went for roads and infrastructure, and 2.5 cents for deficit reduction. Well, they didn't reduce the deficit. They just spent the money."