Battle over 10-cent gasoline tax may have big impact in US, Europe
Loss of President Carter's oil import fee would have repercussions far broader than simply the price of gasoline at the pump. Gone would be the $10.3 billion cushion on which both White House and Congress had counted to bring the fiscal 1981 budget into balance or to provide for a tax cut.
Gone also, says a senior White House official, would be some credibility among European leaders in the determination and ability of Americans to cut down on their burning of gasoline.
When, in mid-March, President Carter announced a $4.62 per barrel fee on imported oil -- designed to boost the retail price of gasoline by 10 cents a gallon -- Europeans applauded.
"Now," said a European cabinet minister, according to the White House official, "one can no longer criticize the President's energy policy."
Currently, the US is urging the other 19 member nations of the International Energy Agency (IEA) to reduce their own imports and consumption of oil.
"I foresee," says the senior White House official, "a reduced willingness on the part of other IEA members to take the kinds of conservation steps we want them to take."
Europeans, he adds, "never tire of pointing out" that Americans burn from three to four times as much gasoline per person as do Japanese, French, West Germans, and other industrialized peoples.
The import fee, in Mr. Carter's eyes, was a tough price measure that would worce energy conservation on Americans and help to persuade other nations to reduce their own reliance on imported oil.
At this writing, the future of the import fee is unclear. The White House is appealing a US District Court judge's decision that Mr. Carter exceeded his authority by using proceeds from the fee to raise the domestic price of gasoline.
The President, according to federal Judge Aubrey E. Robinson Jr., had the right under the Trade Espansion Act of 1962 to impose a fee on imports, but lacked authority from Congress to use this fee to raise the price of gasoline made from domestic oil.
Even if higher courts finally sustain the White House contention that Mr. Carter acted within his rights, both houses of Congress are mounting major efforts to outlaw the fee.
Within the United States, loss of the revenue from the oil import fee would have these effects:
* The price of gasoline would not jump overnight by 10 cents a gallon on May 15, as President Carter had planned.
* This year's consumer price index would be spared a 0.75 percent rise, due to higher gasoline prices stemming from the import fee.
Most Americans, no doubt -- struggling with the declining buying power of their incomes -- would welcome these results.
Some consumer groups -- part of the coalition challenging the President's fee in the courts -- see little logic in raising gasoline prices, when Mr. Carter is fighting inflation elsewhere.
In a broader sense, loss of the $10.3 billion revenue from the import fee would send both Congress and the White House back to the drawing board, so far as the fiscal 1981 budget is concerned.
Because recession forces higher government spending, lawmakers and the President had counted on the import fee revenues to be a budget-balancing asset of last resort.
If they were not needed to keep the budget out of the red, the money would have been used -- as the House of Representatives saw it -- to allow a tax cut of equivalent size.
This tax cut would have lowered taxes on business, with the aim of improving productivity, and would have helped individuals, by offsetting at least part of next year's higher social security taxes.