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Summer Stump at the Gas Pump

Politicians far and wide see cuts in gas taxes as a vote-getter for elections this fall

From New England statehouses to the corridors of the Capitol, political posturing on gasoline taxes has become all the rage.

Here in Washington, dueling press conferences by Republicans and Democrats seek to convince voters that their party is the one that will protect Americans' interests - whether it be to drive cheaply or to maintain funding for education.

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In Massachusetts and New Hampshire, GOP governors have jumped into the tax-cutting fray by proposing temporary suspensions of state gas levies. Gov. William Weld of Massachusetts has proposed cutting state gas taxes by 4.3 cents-a-gallon until a similar federal gas-tax cut can be put in place. His New Hampshire counterpart, Steve Merrill, wants to eliminate the state's gas tax, 18 cents a gallon, completely from Memorial Day to the end of July. He says increased tourism revenues would more than make up for the projected $24 million cost.

In Washington, deficit hawks are furious. The Concord Coalition - ironically, founded by former senators from New England - calls the gas-tax-cutting frenzy "a bipartisan stampede to pander to motorists," and "a sad commentary on the depth of commitment to balancing the budget."

Environmental groups are also disappointed. "There's been a failure of political leadership on the issue from both sides of the aisle," says Dan Lashoff of the Natural Resources Defense Council. "They know that the higher gas tax is the right energy policy. Ninety-nine out of 100 economists say the same thing."

Democrats are generally not anxious to suspend temporarily the 4.3-cent-a-gallon hike in gas taxes they approved in 1993, but they know that a vocal defense of the tax is a losing position. With six months to go before the November elections, it's high political season.

Democrats acknowledge that the temporary tax repeal will eventually pass but are trying to get something in return: a long-hoped-for increase in the minimum wage. Senator Dole agreed to a vote but added a provision to change workplace negotiation rules. Union leaders strongly objected. Democrats promise President Clinton would veto the bill.

The result: gridlock, at least for now.

The bottom line is that Americans love their cheap gasoline and politicians love to please voters in an election year, even if it wreaks havoc with another goal held dear by Republicans - eliminating the budget deficit.

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Republicans have certainly not abandoned their dream of a balanced budget; they've just gotten into hot water with at least one suggestion for how to offset the $2.9 billion in federal revenues that would be lost by suspending part of the federal gas tax. The House of Representatives' No. 2 Republican, Dick Armey, suggested on Sunday that cuts be made in education spending to make up for the lost gas tax money.

Before Mr. Armey could retreat, Democrats seized on the idea and put forward education leaders to denounce it.

But the question of how to pay for a suspended gas tax remains a point of contention, and has proved fertile ground for scoring more political points. On Tuesday, Dole proposed a $100 million cut in the Energy Department's administrative budget, including a reduction in Secretary Hazel O'Leary's travel expenses, itself a sore subject. Dole would also tap into proceeds from the Federal Communications Commission's recent auction of broadcast spectrum space, which brought in billions of dollars.

Separately, the GOP is considering a bill to add to the savings-and-loan deposit insurance fund. A one-time payment by S&Ls into the fund could be used to reduce the budget deficit, according to budget rules. The White House approves of the S&L plan.

But deficit hawks are not assuaged. American gasoline prices are already among the lowest in the world, because of low taxes. (The French, for example, pay the equivalent of $4.56 a gallon, with $3.05 of that in taxes.) And the reason for the recent spike has nothing to do with the 4.3-cent-a-gallon tax increase passed in 1993. Gas companies say prices have shot up, in part, because the rough winter forced them to stop producing heating fuel late in the season. The robust economy has also heightened demand for fuel.

Some states, in fact, have been quietly increasing their gasoline taxes to pay for needed highway repairs and improvements. Connecticut already has the highest state gas tax in the country at 36 cents a gallon, and it is phasing in a 4-cent increase this year. Some state politicians belatedly tried to scale back the tax, but the legislative session ends this week.

Besides, says the governor's press secretary, Dean Pagani, Connecticut's transportation fund already faces a projected deficit. But he has no doubt that similar discussions have been happening all over the country ever since the price of gas spiked up by about 20 cents a gallon.

"I'm sure it's coming up where ever there are gatherings of two or more politicians," says Mr. Pagani.

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