[Congressional Record Volume 142, Number 68 (Wednesday, May 15, 1996)]
[House]
[Pages H5141-H5143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     AMERICANS NEED GAS TAX FREEDOM

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentlewoman from California [Mrs. Seastrand] is 
recognized for 40 minutes as the designee of the majority leader.
  Mrs. SEASTRAND. Mr. Speaker, approximately a week ago we celebrated 
Tax Freedom Day. It is interesting because this year, in 1996, it is 6 
days later than we celebrated Tax Freedom Day in 1993. This is the day 
when across America, hardworking families, moms and dads, keep their 
paycheck, and they have the dollars to stop funding government at all 
levels, and the dollars after Tax Freedom Day actually go to their 
families and their children and to do the things they want to do with 
their dollars.
  Americans do not need to look any further than their 1995 tax return 
to see the difference between Republicans and Democrats. Republicans 
want Americans to keep more of their paychecks. Republicans want 
families to save for their futures, and they want more for the families 
and for our communities across this Nation.
  We kept our promises to the American taxpayers by passing the first 
ever balanced budget in 25 years. We passed the $500-per-child tax 
credit and the repeal of Clinton's assault on working seniors. We want 
seniors to keep more of what they earn.
  But unfortunately President Clinton chose to veto these key 
provisions which were meant to put back power to where power belongs, 
and that is into the hands of working taxpayers, the working families, 
moms and dads across this Nation.
  It is interesting because Washington values here on Capitol Hill are 
so very much different from the folks across America, and in particular 
the folks on the central coast of California. I am very privileged to 
have the right to be voted in by constituents on the central coast of 
California, to represent them. I represent two wonderful counties, San 
Luis Obispo County and Santa Barbara County.
  It is interesting to note, because in 1993 we had a severe gas tax 
hike. It was part of the largest tax hike. It was part of the largest 
tax hike in history. In fact, $4.8 billion alone went to an annual gas 
tax, and I want to remind everyone that that is 30 percent to the 
Federal gas tax, a 30-percent increase. I might also remind people that 
not one Republican voted for the gas tax. It was part of an overall tax 
increase of $268 billion, an entire package. But again, as I said, $4.8 
billion was the gas tax.
  When politicians raise taxes for some reason they do not seem to save 
the money. They spend it. People on Capitol Hill here in Washington, 
DC, when they can get a dollar here, a dollar there, eventually they 
spend it. Spending in 1992 was $1.3 trillion, almost $1.4 trillion. But 
spending in 1995 was $1.57 trillion, almost $1.6 trillion, an increase 
of $190 billion.
  I know I cannot fathom what $1 billion is. It is very hard to work in 
these numbers. I can identify with working families on the central 
coast of California. We deal not in those type of numbers. Only in 
government do we deal in billions and trillions.
  But I know that the gas tax hits the low- and middle-income Americans 
the most, those that need a helping hand from those of us that are 
trying to help them here in Washington. I want to help those people, 
because I know it hits them, those that we always say we care the most 
about.
  Perhaps you have seen that famous quote of President Clinton. It was 
stated in Houston in October of last year, and he was talking about 
raising $268 billion of tax increase, and he admitted, ``Even I think I 
raised taxes too much.''

  I agree, and I think we here in Washington, DC, here in this House 
and this Senate, and we should have the President help to roll back 
President Clinton's tax hikes.
  We have seen definitely that there has been a gas price increase and 
it has been caused by market-driven events, many reasons, and it really 
affects the central coast of California. In fact in Santa Barbara 
alone, the city of Santa Barbara, we saw perhaps the highest prices in 
Santa Barbara than were seen across this Nation, in some instances over 
$2 a gallon.
  So we wonder, why are the retail prices up? I have a response here 
from the Department of Energy. On April 30, 1996, the Department of 
Energy told Senate staff that the recent increases in retail gasoline 
and diesel prices are due to many reasons, and here are some of the 
factors:
  First, tight world crude supplies following a colder than normal 
winter.
  Second, lower U.S. private crude and petroleum stocks due to, well, a 
colder than normal winter. Market decisions by companies to hold 
minimal inventories of crude oil in anticipation of the United Nations 
agreeing to allow Iraq to begin exporting oil.
  Third, higher corn prices than have reduced ethanol production.
  Fourth, normal spring refinery cutbacks while they reconfigure to 
decrease heating oil production and increase gasoline production for 
the summer driving season.
  And, finally, fifth, in California, my State, particular shortages 
because of California's required introduction of a particular form of 
reformulated gasoline. The shortages were due to production run 
problems at several California refineries.
  It is interesting, just recently in the Washington Post one of the 
reporters said today's prices are set by the absence of refining 
capacity and unnecessary environmental regulations, and that really 
does apply to California. We are all interested in cleaner air, but 
there is a price to be paid.
  Overall, retail prices of motor fuels in the United States have 
increased sharply since the winter to their highest level since 1990. 
Especially in California, we are preparing for the tourist season. 
Tourism is very important to the central coast of California and so we 
are preparing for that busiest season and concerned about whether the 
folks are going to come.
  But with gas prices soaring all over the country and especially, as I 
said, in my own backyard, I want to do something to help ease the 
burden of those rising gas prices. I think we need some relief and some 
immediate relief.
  I have introduced a bill that would temporarily repeal the Clinton 
gas tax until 1997 to allow the oil markets a chance to recover from a 
shortage in supply. The bill is H.R. 3415.
  Again, the central coast of California, every time I go home, and 
that is every weekend, folks will tell me that they just are overtaxed. 
They need some relief from the paperwork and the burdens of regulation, 
from all levels of government, and they wholeheartedly agree that 
immediately they would like to see saving some of that 4.3 cents that 
we pay because of the Clinton tax hike. They would like to put that in 
their pocket. They think it would relieve California and the central 
coast gas pains. It is amazing the good support I am getting on the 
central coast of California, and I think this is typical across this 
Nation.
  But it is interesting because we hear a lot of naysayers on Capitol 
Hill here in Washington, DC. They say, the attitude is, why do we have 
to reduce the taxes? They just do not get it. They just do not 
understand the needs of working folks across this Nation and especially 
the folks in California.

[[Page H5142]]

                              {time}  2045

  Here in Washington on the Hill, you can have an apartment and you 
just walk to the office. Some people do not even own a car. Not so, not 
so from where I come from. Some people make, well, they can make a 100-
mile round trip just going to the supermarket. California is different. 
I am sure this is also true in many of our rural areas across this 
Nation.
  Well, my proposal to repeal the Clinton gas tax and return the money 
where it belongs, to the hardworking taxpayers, I hope you would 
consider what this means, not only cutting, putting the 4.3 cents in 
your pocket, but what it means to the other things you have to pay for, 
the transportation prices. When you think about the trucking industry 
and what we get delivered to our cities and areas, and how important 
gasoline is to moving our goods and services across this Nation, well, 
we have to sit back and think about all the things we buy: Our food, 
the cattle industry, the produce industry. Or if you just want to move 
from one place in these United States to another, all of this is done 
with gas.
  Again, that 4.3 cents per gallon is going to mean lower dollars, 
lower transportation costs. Recent studies have documented the positive 
effect of repealing the Clinton gas tax. It would reduce taxes by 
almost $5 billion a year, and $550 million in California alone.
  In addition, you know, we would recoup some of the jobs lost to that 
tax increase. The gas tax of 1993 is responsible for the loss of 8,000 
jobs in California alone, and 69,000 jobs nationwide.
  Earlier this year President Clinton and many of his Democrat 
colleagues who serve in Congress had the opportunity to cut taxes for 
the working American families, but they were committed to protecting 
Washington spending, and I believe they should be given another 
opportunity to reduce the tax burden of the American people.
  Let us repeal the 1993 Clinton gas tax. Retail prices of motor fuels 
in the United States have increased sharply since the winter, to their 
highest levels since 1990. The Federal excise tax on gasoline was first 
enacted in 1932, and 1951 for diesel fuel. We started, as usual, with 
initial levels of 1 and 2 cents per gallon respectively, and then the 
taxes were raised gradually to 4 cents by 1959. From 1983 to 1993, 
there were five Federal tax increases on gasoline, raising them to 
their present levels of 18.3 cents a gallon.
  Sometimes I think we do not realize how much we pay on an average 
gallon of gas when we fill it up. I should say of that 18.3, 14 cents 
goes into the highway trust fund and the 4.3 cents, well, it just goes 
into the general fund.
  Now, that is the Clinton tax increase of 1993. I think it is 
important to stop here to repeat that. Only 14 cents of the 18.3 cents 
of Federal taxes on each gallon of gas that you purchase at the pump, 
only 14 cents goes into the trust fund for the roads, the bridges, to 
take care of those potholes when you are traveling along the freeways.
  The 4.3 cents of the tax hike went to the general fund. I get a lot 
of postcards because people say maybe we could keep that money and fix 
the pothole on the freeway that I drive every day and let us not give 
it back. I would rather see the pothole filled up.
  But, ladies and gentlemen, the 4.3 cents, the tax hike of 1993, does 
not go for your highways, for building bridges. It does not go for mass 
transit if you like in an urban city. In fact, the tax you are paying 
on your airline ticket today on the aviation fuel, that does not go for 
helping meet your transportation needs. It just goes into the General 
Fund, and only again in Washington, DC, do you have people here that 
feed the bureaucracy for more spending. It is dedicated, the 4.3 cents 
is dedicated to finance Washington spending on the bureaucracy.

  Let me give you an example, in Santa Barbara County. I just heard 
there is consideration that we may have a measure on the November 
ballot to raise several million dollars to offset $100 million of 
backlog in maintenance on our county roads.
  Well, here I have 4.3 cents that is just going into the general fund, 
when locally now the folks in Santa Barbara County may be asked to 
consider raising several million dollars to take care of backlog in 
maintenance. Something is wrong here.
  The Congressional Research Service, a nonpartisan organization, 
estimates that, other things being equal, repeal of the 4.3 cent fuel 
tax would cause refiners, importers, and terminal operators to decrease 
wholesale prices by about three-fourths of the overall excise tax. I 
would say about 3.2 cents. Retail gasoline prices would tend to 
decline, and any decrease in the prices of gasoline and other motor 
fuel would tend to increase the demand for fuel and for complementary 
goods and services by reducing the cost of the vehicular transportation 
and related travel relative to the other costs and services. Therefore, 
the demand for substitute goods and services such as home recreation 
and other activities would tend to go down.
  A decrease in the gasoline tax would increase, and I underline this 
word, household's disposable income, reduce business costs per unit of 
output, and would increase total demand for goods and services, thus 
having an expansive effect on economic activity.
  Now, there have been questions asked about the bill to repeal the tax 
on gas from 1993, and one in particular is that even if the Clinton gas 
tax is repealed, it will not necessarily be passed on to the consumer.
  Well, my bill, H.R. 3415, contains language that states the benefits 
of the tax repeal should be passed on to the consumers, and it requires 
that the Comptroller General of the United States conduct a study to 
assure pass-through of such a repeal.
  It was interesting, because a colleague on the other side of the 
aisle just recently brought up his concern that passing that gasoline 
tax repeal will simply line the pockets of the big oil companies and 
will not be passed on to the consumers. I understand that concern. But 
certainly retailers I believe will always try to slowly drop the price 
of gasoline. However, the Department of Energy is predicting normal 
supplies and prices this summer.
  Moreover, both world and domestic crude prices have fallen every day 
since early last week, and well before the President's announcement 
regarding SPR sales on Monday of last week. With gasoline prices 
expected to decline through this summer, market competition and full 
supply marketplace will make it very difficult, I believe, for 
retailers to keep the 4.3 cents if the tax is repealed.
  I would just say other questions have been raised about the costs 
associated with this bill, and the answer to that is that we have the 
offsets, and they are found in reducing the size of rampant travel and 
other expenses at the Department of Energy. We also are going to look 
to the FCC auctioning off broadcast spectrums, and the Committee on the 
Budget chairman, Mr. Kasich, has assured us that we are on target to 
balance the budget by fiscal year 2002, even with this temporary repeal 
of the Clinton gas tax.
  Well, Mr. Speaker, I guess it is the old story, the Democrats never 
met a tax increase the did not like. I would like to quote the minority 
leader from the Senate:

       Well, it seems to me the Republicans' only issue, I am sure 
     if you talked about the weather, they would come up with a 
     tax cut, if you talked about heart problems, they would come 
     up with a tax cut, and any problem that you think of in this 
     country can be fixed with a tax cut, if you listen to 
     Republicans. Again, we have got high prices. Let's not look 
     at resources and supply and demand. Let's have a tax cut.

  That is the Senate minority leader on April 29 of this year. Again, 
yes, I am looking to a tax cut, because I know how important it is for 
my folks to drive up to that pump, to fill up their tank and have to 
travel many miles on the central coast of California, and 4.3 cents in 
some tax relief to them is very important. And I make my case, the 
Democrats never met a tax increase the did not like.
  From the way the Democrats are defending this tax hike, charging that 
its rollback will not get passed on to the consumers, it sounds like 
they cannot wait to increase gas taxes again.
  As I said, I go home every weekend, and my constituents are telling 
me that they would like to see some relief. The students at U.C. Santa 
Barbara, the students at Cal Poly that have to travel miles, they want 
to see some relief. The cattlemen that take their cattle to and from 
market want to see relief. The produce industry, which is very big, 
taking the lettuce to market, it is very important and they want to

[[Page H5143]]

see tax relief. And just the average mom and dad want to see tax relief 
so they can take the kids to school, get to work, get to the grocery 
store, get to little league, and do all the important things that are 
important in their life.
  I believe, yes, that the best way to lower gas prices and relieve not 
only the central coast of California gas pains, but our Nation's gas 
pains, is to repeal the Clinton gas tax. It is time. It is time we let 
working men and women keep more of their hard-earned dollars, and not 
have the bureaucrats here in Washington say that they know best how to 
spend those hard-earned dollars.
  Mr. Speaker, since its imposition in October of 1993, the gas tax has 
taken $613 million out of the economy. That is money that Californians 
could have had. Repealing the gas tax also would reduce taxes, as I 
said earlier before, by almost $5 billion annually. And I want to 
repeat this number, it would reduce taxes in California by $550 
million. A repeal of the gas tax, I am summarizing here if you notice, 
the repeal of the gas tax would recoup the jobs most to the tax 
increase. If you recall, I said we lost 8,000 jobs in California, and I 
want to work for those 8,000 jobs, get them back, and I am going to 
work for the 69,000 jobs that we lost nationwide.
  The Democrats love big government. They are so wedded to the old 
status quo that they are willing to deny American families, including 
those on the central coast of California, an annual $48 tax break. I 
think you all would remember that last year, or I should say last 
election, we heard slogans like ``It is the economy, stupid.'' Well, I 
guess that if there was a slogan to be had this election time, we 
should remind people that it is the paycheck, stupid. The folks need to 
see more of the dollars kept in their paycheck and spend those hard-
earned dollars as they best decide.
  I would say, let the bureaucrats here decide how they are going to 
tighten their belts, and put their agency and their particular program 
on a diet. I would rather have the folks on Capitol Hill here in the 
bureaucracies decide how to tighten the belt, rather then my folks on 
the central coast of California.

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