http://www.nytimes.com/2004/04/06/politics/06CHEN.html
WASHINGTON, April 5 ? In October 1986, when Dick Cheney was the lone congressman from energy-rich Wyoming, he introduced legislation to create a new import tax that would have caused the price of oil, and ultimately the price of gasoline paid by drivers, to soar by billions of dollars per year.
"Let us rid ourselves of the fiction that low oil prices are somehow good for the United States," Mr. Cheney, who is now vice president, said shortly after introducing the legislation.
Oil prices had plunged to $15 from nearly $40 a barrel in the early 1980's, as Saudi Arabia flooded world markets, and Mr. Cheney argued the tax was needed to stabilize oil-state economies devastated as a result. But other lawmakers, including some Republicans, criticized the Cheney plan and similar proposals as "snake oil" that would throw 400,000 Americans out of work. They also said then, as President Bush does now, that higher taxes would stall the economy.
Renewed attention on Mr. Cheney's plan, which Democrats dusted off and talked about on the Senate floor last week, offers another wrinkle in this year's politicized debate about gas prices, which hit a record-high average of $1.76 last week for a gallon of regular. While gas prices may remain a presidential campaign issue if they do not decline, they are still well below the inflation-adjusted high of nearly $3 in March 1981.
To deflect charges that the White House has not done enough to bring down prices, the Bush campaign has attacked Senator John Kerry, the likely Democratic presidential nominee, as favoring higher gas prices. "Some people have wacky ideas like taxing gasoline more so people drive less. That's John Kerry," a recent Bush campaign commercial said. The commercial singled out Mr. Kerry's support a decade ago for a 50-cent gas tax increase, part of a deficit-reduction package that Mr. Kerry never voted for.
Yet the cost of Mr. Cheney's plan ultimately would have been passed on to drivers and other consumers through higher prices on gasoline and other refined petroleum products. In addition, he said in a February 1987 statement, he supported the tax partly because it would "assist us in reducing our budget deficit."
Under Mr. Cheney's proposal, any foreign oil bought for less than $24 per barrel would have been taxed with a fee equal to the difference between the cost of imported oil and the $24 base price. According to the federal Energy Information Administration, the cost of imported oil in the late 1980's and most of the 1990's stayed well below $24, except for a brief period following Iraq's invasion of Kuwait. In fact, oil imports cost less than $18 per barrel over much of that time, so when that was the case the Cheney plan could have led to oil taxes of $6 or more per barrel, driving up demand for domestic oil.
But the plan also included a complicated formula tying the taxes to gains in inflation and the gross national product. Senator Richard J. Durbin, Democrat of Illinois, who criticized the plan in a speech last week, said if it had been enacted when Mr. Cheney introduced it, in the years that followed it would have cost consumers $1.2 trillion.
Robert M. Simon, Democratic staff director of the Senate Energy Committee, said he used an analysis by the Congressional Research Service to calculate that the $24 price base, after adjusting for inflation, would have grown steadily to $48.24 by this year. In comparison, the price of West Texas crude oil recently peaked at $38 but has settled around $34, well above the recent lows of $11 in 1998 and $18 in 2001.
Mr. Cheney has often guided the Bush administration's energy policy, and in 2001 he headed a task force charged with increasing energy production.
"It is hard to explain," Mr. Durbin said, "how they could attack John Kerry for even considering a 50-cent gas tax, which he didn't introduce or vote for, and ignore Cheney's own legislation in 1986 which would have dramatically raised the cost of gasoline. If every vote and every statement made by John Kerry is fair game, the same thing is true of President Bush and the vice president."
A spokesman for Mr. Cheney declined to comment.
Scott Stanzel, a spokesman for the Bush-Cheney campaign, said Mr. Kerry had consistently supported higher taxes on gasoline. "President Bush and Vice President Cheney want to keep taxes low and keep the economy moving," Mr. Stanzel said. "They have proposed an energy plan that will provide for a stable, affordable and secure energy supply."
Other lawmakers from energy-producing states had offered plans similar to Mr. Cheney's proposal in the mid-1980's after seeing thousands of constituents lose jobs in the oil-sector recession. Mr. Cheney said at the time that unemployment in Wyoming was 9 percent and he argued that the low prices could permanently impair domestic oil production and leave the United States at the mercy of foreign suppliers.
But the oil-tax plans angered lawmakers from other states who said they would lead to plant closings.
Senator John Heinz of Pennsylvania, a Republican, said in February 1987 that the proposals would add $1.3 billion per year to the energy costs of Pennsylvania consumers. He also cited a study done for a federal reserve bank suggesting that a $5 per barrel fee would lead to the loss of 400,000 jobs nationwide and cause inflation to soar.
In a statement condemning the proposals to tax oil imports, Mr. Heinz said, "I want to bring this vampire into daylight now before it sneaks out of Congress and drains the lifeblood from our economic recovery."
WASHINGTON, April 5 ? In October 1986, when Dick Cheney was the lone congressman from energy-rich Wyoming, he introduced legislation to create a new import tax that would have caused the price of oil, and ultimately the price of gasoline paid by drivers, to soar by billions of dollars per year.
"Let us rid ourselves of the fiction that low oil prices are somehow good for the United States," Mr. Cheney, who is now vice president, said shortly after introducing the legislation.
Oil prices had plunged to $15 from nearly $40 a barrel in the early 1980's, as Saudi Arabia flooded world markets, and Mr. Cheney argued the tax was needed to stabilize oil-state economies devastated as a result. But other lawmakers, including some Republicans, criticized the Cheney plan and similar proposals as "snake oil" that would throw 400,000 Americans out of work. They also said then, as President Bush does now, that higher taxes would stall the economy.
Renewed attention on Mr. Cheney's plan, which Democrats dusted off and talked about on the Senate floor last week, offers another wrinkle in this year's politicized debate about gas prices, which hit a record-high average of $1.76 last week for a gallon of regular. While gas prices may remain a presidential campaign issue if they do not decline, they are still well below the inflation-adjusted high of nearly $3 in March 1981.
To deflect charges that the White House has not done enough to bring down prices, the Bush campaign has attacked Senator John Kerry, the likely Democratic presidential nominee, as favoring higher gas prices. "Some people have wacky ideas like taxing gasoline more so people drive less. That's John Kerry," a recent Bush campaign commercial said. The commercial singled out Mr. Kerry's support a decade ago for a 50-cent gas tax increase, part of a deficit-reduction package that Mr. Kerry never voted for.
Yet the cost of Mr. Cheney's plan ultimately would have been passed on to drivers and other consumers through higher prices on gasoline and other refined petroleum products. In addition, he said in a February 1987 statement, he supported the tax partly because it would "assist us in reducing our budget deficit."
Under Mr. Cheney's proposal, any foreign oil bought for less than $24 per barrel would have been taxed with a fee equal to the difference between the cost of imported oil and the $24 base price. According to the federal Energy Information Administration, the cost of imported oil in the late 1980's and most of the 1990's stayed well below $24, except for a brief period following Iraq's invasion of Kuwait. In fact, oil imports cost less than $18 per barrel over much of that time, so when that was the case the Cheney plan could have led to oil taxes of $6 or more per barrel, driving up demand for domestic oil.
But the plan also included a complicated formula tying the taxes to gains in inflation and the gross national product. Senator Richard J. Durbin, Democrat of Illinois, who criticized the plan in a speech last week, said if it had been enacted when Mr. Cheney introduced it, in the years that followed it would have cost consumers $1.2 trillion.
Robert M. Simon, Democratic staff director of the Senate Energy Committee, said he used an analysis by the Congressional Research Service to calculate that the $24 price base, after adjusting for inflation, would have grown steadily to $48.24 by this year. In comparison, the price of West Texas crude oil recently peaked at $38 but has settled around $34, well above the recent lows of $11 in 1998 and $18 in 2001.
Mr. Cheney has often guided the Bush administration's energy policy, and in 2001 he headed a task force charged with increasing energy production.
"It is hard to explain," Mr. Durbin said, "how they could attack John Kerry for even considering a 50-cent gas tax, which he didn't introduce or vote for, and ignore Cheney's own legislation in 1986 which would have dramatically raised the cost of gasoline. If every vote and every statement made by John Kerry is fair game, the same thing is true of President Bush and the vice president."
A spokesman for Mr. Cheney declined to comment.
Scott Stanzel, a spokesman for the Bush-Cheney campaign, said Mr. Kerry had consistently supported higher taxes on gasoline. "President Bush and Vice President Cheney want to keep taxes low and keep the economy moving," Mr. Stanzel said. "They have proposed an energy plan that will provide for a stable, affordable and secure energy supply."
Other lawmakers from energy-producing states had offered plans similar to Mr. Cheney's proposal in the mid-1980's after seeing thousands of constituents lose jobs in the oil-sector recession. Mr. Cheney said at the time that unemployment in Wyoming was 9 percent and he argued that the low prices could permanently impair domestic oil production and leave the United States at the mercy of foreign suppliers.
But the oil-tax plans angered lawmakers from other states who said they would lead to plant closings.
Senator John Heinz of Pennsylvania, a Republican, said in February 1987 that the proposals would add $1.3 billion per year to the energy costs of Pennsylvania consumers. He also cited a study done for a federal reserve bank suggesting that a $5 per barrel fee would lead to the loss of 400,000 jobs nationwide and cause inflation to soar.
In a statement condemning the proposals to tax oil imports, Mr. Heinz said, "I want to bring this vampire into daylight now before it sneaks out of Congress and drains the lifeblood from our economic recovery."
Facebook
Twitter