Lawmakers May Lift Gas Tax to Relieve Soaring Prices

Soaring gasoline and oil prices are prompting talk in Congress about temporarily lifting a 4.3-cent per gallon gas tax imposed seven years ago, and giving renewed attention to opening an environmentally sensitive Arctic refuge to oil drilling.

Republican senators acknowledged the Arctic drilling proposals, which attracted 31 GOP senators Wednesday, was a long shot and aimed at dealing with long term oil import problems. Environmentalists immediately denounced the idea.

But with gasoline prices projected to possibly hit $2 a gallon this summer, a growing number of lawmakers are suggesting a temporary cut in the 4.3-cent tax imposed in 1993. At the time Democrats were in the majority and pushed the tax through over solid Republican opposition.

“We’ve got to take down the price of gas this summer,” said Sen. Ted Stevens (R-Alaska), suggesting one way to help do that was suspending the 1993 excise tax.

Stevens, who is chairman of the Appropriations Committee, said the high cost of oil is being felt by the government as it is by the average motorist.

The Pentagon is $2 billion short in meeting its fuel costs because of the price increases in diesel, jet fuel and gasoline, he said. The House this week approved $1.8 billion more for the Pentagon to pay fuel bills, and Stevens says the Senate will do something similar.

But the idea of a cut in the federal gasoline excise tax was getting a cool reception from the very lawmakers who write the tax laws.

While it might be politically attractive, Rep. Bill Archer (R-Texas), chairman of the House Ways and Means Committee, said he was troubled by the idea of cutting a tax and then reinstating it.

“I am for tax reduction whenever you can put them on the books. I’m a little concerned when we say we’re going to do it, then we’re going to take it back,” Archer said.

Such a tax cut, even if temporary, also would take billions of dollars from the federal trust fund for highway construction, something that does not set well with lawmakers planning the transportation budget, nor the powerful highway lobby.

Sen. Frank Murkowski (R-Alaska), who favors suspending the 4.3-cent tax, said the lost revenue could be made up later when gas prices go down.

But Murkowski said the turmoil over oil prices--and America’s growing dependence on foreign oil--is clear evidence that an Arctic refuge in northern Alaska should be opened to drilling.

Alaska’s two senators for years have tried to get Congress to approve drilling in the Arctic National Wildlife Refuge. One year a bill passed to allow such development, but was vetoed by President Clinton.

Murkowski acknowledged this would do nothing to ease the current gasoline price crunch, but that the United States must take steps to produce more oil domestically. Otherwise, he said, the country, which now relies for 56% of its oil from abroad, will see that number continue to climb to nearly two-thirds by 2020.

He said his bill had 31 co-sponsors. The Interior Department has estimated there are between 9 billion and 16 billion barrels of oil beneath the refuge’s coastal strip on the Arctic Ocean east of the Prudhoe Bay fields.

Interior Secretary Bruce Babbitt said he strongly opposes oil developing in the refuge and that Clinton would veto such legislation. “We’ve made it clear again and again. We will protect this last undeveloped fragment of America’ arctic coastline,” he said, adding that it’s home to thousands of caribou, polar bears, swans, snow geese, musk oxen and other species.

Meanwhile, the Senate Foreign Relations Committee gave unanimous support to a nonbinding resolution calling on Clinton to communicate the need for increased oil production to the Organization of Petroleum Exporting Countries.