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Sharp Reaction to G.O.P. Plan on Gas Rebate

By CARL HULSE and DAVID D. KIRKPATRICK, The New York Times

WASHINGTON (April 30) - The Senate Republican plan to mail $100 checks to voters to ease the burden of high gasoline prices is eliciting more scorn than gratitude from the very people it was intended to help.



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Sen. Bill Frist's office played a large role in the plan to reimburse citizens $100 for high gas prices. The plan has received backlash even from conservatives, who have said it is "silly" and treats people like "whores."

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Aides for several Republican senators reported a surge of calls and e-mail messages from constituents ridiculing the rebate as a paltry and transparent effort to pander to voters before the midterm elections in November.

"The conservatives think it is socialist bunk, and the liberals think it is conservative trickery," said Don Stewart, a spokesman for Senator John Cornyn, Republican of Texas, pointing out that the criticism was coming from across the ideological spectrum.

Angry constituents have asked, "Do you think we are prostitutes? Do you think you can buy us?" said another Republican senator's aide, who was granted anonymity to openly discuss the feedback because the senator had supported the plan.

Conservative talk radio hosts have been particularly vocal. "What kind of insult is this?" Rush Limbaugh asked on his radio program on Friday. "Instead of buying us off and treating us like we're a bunch of whores, just solve the problem." In commentary on Fox News Sunday, Brit Hume called the idea "silly."

The reaction comes as the rising price of gasoline has put the public in a volatile mood and as polls show that cynicism about Congress is at its highest level since 1994.

Still, Eric Ueland, chief of staff to Senator Bill Frist of Tennessee, the Republican leader, whose office played a main role in pulling the proposal together, said the rebate was an important short-term step in a broader array of measures that began with last year's energy bill. Constituents "believe government ought to step up to the plate rather than loll around in the dugout," Mr. Ueland wrote in an e-mail message on Sunday.

After members of Congress returned from the spring recess, when they got an earful about gas prices above $3 a gallon, they raced to propose solutions that might take effect before the elections. Democrats were pushing for a 60-day suspension of the federal gas tax of 18.4 cents a gallon, and the Senate Republican leadership settled on the rebate.

Those leaders and Finance Committee aides said many Republicans opposed the Democratic plan because they feared that oil companies, which pay the gas tax, would not pass savings on to the public, or that the laws of supply and demand would push the price up again.

There was also the probable opposition of House Republicans, who have been reluctant to jeopardize the flow of the gas tax revenue to the highway trust fund that underwrites road and bridge projects.

"Our folks thought it might amount to nothing for consumers," said one aide who was granted anonymity to discuss internal leadership deliberations.

Under the proposal, $100 checks would be sent late this summer to an estimated 100 million taxpayers, regardless of car ownership. Single taxpayers with adjusted gross incomes above about $146,000 would be ineligible for the checks, as would couples earning more than about $219,000. The $100 figure was determined by Mr. Frist's office, which calculated that the average driver would pay about $11 per month in federal gas taxes over nine months.

The rebate was the signature element of a broader Senate Republican leadership plan announced Thursday that included new incentives for the oil industry to increase its refining capacity and for consumers to buy hybrid cars. It would open the Arctic National Wildlife Refuge in Alaska to drilling and would impose an accounting change forcing oil companies to pay higher taxes on fuel sold from stockpiles.

The proposal would also give the executive branch new authority to set fuel standards for cars, an idea that will get a hearing in the House this week.

David Winston, a Republican pollster who advises the Senate Republican leadership, called the rebate an intuitive way to show voters that Republicans were on their side. "It is like putting the American family budget ahead of oil company profits," Mr. Winston said. "How do you help the American families out? Well, give them some money."

But disapproval started flowing in almost as soon as the idea surfaced, said aides in several Republican offices. One senior aide to a Southern lawmaker said the calls were surprisingly harsh. Some complained that the rebate would amount to only two fill-ups at the gas station.

Even though some voters have been outspoken in their opposition to the $100 rebate, Democrats still want credit for being the first to think of putting money back in taxpayers' pockets. A few days before the Republicans went public with their plan, Senator Debbie Stabenow, Democrat of Michigan, proposed a $500 rebate plan, a figure that she said was more commensurate with how much the higher gas prices will cost Americans this year.

Ms. Stabenow also criticized Republicans for linking the rebate to oil drilling in the arctic refuge.

Republicans know that drilling in the refuge "is highly controversial and not going to happen," Ms. Stabenow said. "I question their sincerity in putting this forward."

When the Republican program might reach the Senate floor is still uncertain. Mr. Frist had suggested that he might try to attach the plan to the emergency spending bill the Senate is debating, but aides said that was now less likely and that Republicans might ultimately bring their proposal forward on its own.

On television news programs on Sunday, several Republicans emphasized the need for long-term solutions and played down the rebates. "I don't think much about the $100 rebate," Senator Trent Lott, Republican of Mississippi, said on "Late Edition" on CNN. "We're going to have to produce more domestic oil, natural gas. We're going to have to build pipelines, liquefied natural gas plants."

Senator Lisa Murkowski, Republican of Alaska, struck a similar note on the CBS program "Face the Nation." "I don't think it's a real answer," she said. "It's a temporary Band-Aid. I don't think that it's, again, the long-range solution."

But in his e-mail message, Mr. Ueland, the chief of staff to Senator Frist, dismissed the accusations of pandering as the inevitable price of taking any action. "It's the way of the world to dog Washington when members respond to constituent concerns, but to be responsive is part of how the system is designed."


05-01-06 11:13 EDT

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If 100 dollars allow you to fill your car twice then sell it... or STFU...

__________________
To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

Shek

Reducing the tax at this point in time would have a peverse effect on the demand for gasoline, and most likely would result in little to no savings. The tax rebate is the proper way to relieve some of the pain at the pump without tinkering with the basic supply and demand equations that determine price. When I get home, I post up the economic fundamentals behind why a rebate is smarter than a tax break.

__________________
"So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

Shek

Actually, instead of posting the econ stuff, which is a little bit technical if you haven't had micro theory, the basics are this:

If you cut the tax, then you reduce the price. People see the reduced price at the pump, and then won't limit themselves on driving, thus increasing demand at a time when supply is restricted. Prices rise and the tax savings becomes moot.

Give a rebate, and if it's the $100, people will think it's crap, will see the $3 gas prices, and keep on consuming as if there was no rebate. If it's the $500, people will use it towards buying a big screen TV instead of gas, and so they'll still treat gas at its $3 price. Bottomline, people for the most part won't behave as if that $100 or $500 or whatever is in their pocket, and so demand for gas doesn't change.

JBodnar39

Drill In Anwar!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

gunnut

Drill ANWR

Drill offshore

More refineries (there hasn't been a new refinery built in nearly 30 years and we are running at near 100% capacity at our current level)

Build nuke plants to relieve some fossil fuel plants

and last but not least...

DRIVE SMALLER CARS FOR FVCKS SAKE!!!

JBodnar39

Here is the Democrats answers to your very logical suggestions:

No

No

No

Gun Grape

OK

Just not in the Gulf off Florida. I like my view
Just as long as its not around where I live. They smell bad

Lots and lots of them


Oh hell no. I wouldn't trade my Land Cruiser for anything. What I drive shouldn't matter to you. You don't pay for the gas

gunnut

NIMBY

NIMBY


I have no problem with people driving big cars as long as they don't complain about gas prices. I drive a relative gas guzzler and I have never complained about gas prices. In fact I think gas prices should go higher.

But people in general like to complain but don't like the solution. Resources are limited. There's no such thing as free lunch. If you want the big cars, the convenience, the status symbol, the independence, then you shouldn't complain about the trade off, which is the cost.

We can even drive big cars yet still cut down on gas consumption.

I saw my neighbor drive her SUV 200 FEET down the street to visit another neighbor. It was a nice day. Sunny, 70F, breeze, no smog. BUT SHE HAD TO DRIVE!!! Walk once in a while. It's not that bad.

Gun Grape

And thats exactly why those things havn't happened.

It also helps that my Gov is the Prezs brother

TopHatter

My feelings exactly. Congress is the biggest bunch of whores in the nation. I guess they figure because they can be bought like so many Saturday night hookers, that the whole country must be populated by the same damn thing.

What a sick joke

__________________
If your actions inspire others to dream more, learn more, do more and become more, you are a leader.
~John Quincy Adams

Anon

It's democrazy in action baby.

guppy

making gasoline cheaper and giving people more money to purchase gasoline with will both increase demand.

tax cuts just get rid of the middle man.

__________________
rock chalk

jay hawk

KU

Shek

When do you spend your tax refund? During the year, or at the end of the year when you get it in the mail (or in the days/weeks between filing and getting the check in the mail). The vast majority of Americans base their spending behavior on having the cash in hand or waiting for the check to come in the mail. The lesson here is that you will have little demand increase from the tax rebate.

Furthermore, if the rebate becomes substantial enough, the less likely that it will be used to retroactively pay for gas that was purchased. If you get a check for $100, will you put it in the bank to pay yourself back for the money that you couldn't save because you bought extra gas in anticipation of receiving the rebate? Given the low savings rates in the US, which creates the necessity for foreign capital inflows to fund our economy, the answer is that the tax rebates won't be spent towards gas. They will fund a fun Friday night at the bar, fund a nice dinner, fund a day at the spa, etc.

The economics theory is crystal clear, and the behavior of consumers supports theory.

gunnut

Very interesting point, shek. I haven't thought about it in that term.

The Congress is also considering suspending the federal gas tax for 2 months to ease the price at the pump. Federal gas is a straight up $0.18/gal. Not a whole lot of savings and may in fact generate more demand, or delay the decline in demand, however one wishes to look at it.

California charges a state gas tax and a sales tax on top of that. Both are by percentage. So we are being gouged more at the state level than by the feds.

Basically, we need to learn how not to waste gasoline. We shouldn't use a lot of it just because it's cheap. At the same time, we shouldn't gripe when it gets expensive. Oil price is determined on the international market rather than individual oil companies. Unfortunately the public has failed to see this point.

Shek

I took Powerline to task on this issue last week:

Now, I actually signed my name instead of "Big Daddy Econ", but I figured I'd get a chuckle or two from those who were able to stick with reading my message until the end

As soon as I saw the Powerline post, I instantly recalled this same concept being part of my micro course.

In the end, this reaction to the high as prices is all politics, with the electorate demanding that the polis do something/anything. I agree with you - supply and demand can suck, but it's reality - deal with it!