[Congressional Record Volume 146, Number 45 (Tuesday, April 11, 2000)]
[Senate]
[Pages S2497-S2506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INSTITUTING A FEDERAL FUELS TAX HOLIDAY--Resumed
The PRESIDING OFFICER. There will now be 10 minutes equally divided.
Who yields time?
The Senator from Arkansas.
Mrs. LINCOLN. I yield myself 5 minutes.
The PRESIDING OFFICER. The Senator from Arkansas.
Mr. WARNER. Do I understand, the Senator yields herself 5 minutes? Is
there not 10 minutes under joint control on the subject of gas taxes?
The PRESIDING OFFICER. Yes. There are 10 minutes equally divided. She
has yielded herself 5 minutes.
Mr. WARNER. Off the control of which Senator's time? My understanding
is Senator Byrd controls the time for Senators in opposition, of which
I am aligned. Senator Murkowski controls the proponents' time.
Am I not correct on that, Mr. President?
Mrs. LINCOLN. As an opponent on the Democratic side.
The PRESIDING OFFICER. The Senator from Arkansas is taking her 5
minutes in opposition.
Mr. WARNER. That would then remove all opposition time; is that
correct?
The PRESIDING OFFICER. That is correct.
Mr. WARNER. I ask the Senator, could I have the benefit of a minute
of that time?
Mrs. LINCOLN. Certainly.
The PRESIDING OFFICER. The Senator from Arkansas is recognized for 4
minutes.
Mrs. LINCOLN. I thank the Chair.
Mr. President, I spoke briefly last week about this proposal to
reduce the gas tax. I spoke on the need for reforms in our Nation's
energy policy.
However, because this bill did not go through committee, and because
it has had little technical scrutiny, there are just two points that I
believe should be considered before we move ahead with this idea.
First, I appreciate the concern that has recently been shown for the
highway trust fund. There is a nice clause in this bill that would take
money out of general revenues to pay for the reduction into the highway
trust fund.
Last week I called this hocus pocus. It is creative, to say the
least. But let's get honest here. This tax cut has to come from
somewhere, and this method of accounting is not without consequence.
Regardless of the good intentions being professed by my colleagues,
the transfer of this burden to general revenues would result in a tax
increase to the people of my State and perhaps other States.
In Arkansas, any reduction, either whole or in part, of the existing
excise tax on motor fuels will result in a penny-for-penny increase in
tax at the State level. This is the law in my State, and I know that
there are similar provisions in Tennessee, Oklahoma, Nevada, and
California.
Mr. President, I ask unanimous consent that a copy of section 27-70-
104 of the Arkansas Code be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Sec. 27-70-104. Federal excise tax on motor fuels
(a) Should the Congress of the United States extend an
option to the State of Arkansas to collect all or part of the
existing tax on motor fuels imposed by the Internal Revenue
Code, Chapter 31, Retailers Excise Tax, Sec. Sec. 4041 and
4081, it is declared that the option is executed.
(b) Further, if the federal excise tax is reduced in any
amount, the amount of the reduction will continue to be
collected as state highway user revenues.
(c) Any increase in the federal excise tax, accompanied by
state option, shall be disbursed as set forth in subsection
(d) of this section.
(d) Any revenues derived under subsection (a) of this
section will be classified as special revenues and shall be
deposited in the State Treasury to the credit of the State
Apportionment Fund for distribution under the Arkansas
Highway Revenue Distribution Law, there to be used for the
construction of state highways, county roads, and municipal
streets.
History: Acts 1975, No. 610, Sec. Sec. 1, 2; 1981, No. 719,
Sec. 1; A.S.A. 1947, Sec. Sec. 76-337, 76-338.
Mrs. LINCOLN. I agree that this bill might give a minor tax reduction
for the oil producers of 45 States, but the tax burden would remain
level in as many as five States. Without a reduction in spending, this
amounts to a tax increase in my home State and two of my neighboring
States, Oklahoma, and Tennessee. In short, if this bill were to pass,
taxes, in effect, would go up in Arkansas.
My second point is that this bill would not get relief to the people
who need it. I said last week that this tax is collected on the
wholesale level and all that this bill offers is a suggestion that the
wholesalers pass this on to the consumers. I am not sure that this
point is getting out to my colleagues, so I have a quote here from the
Supreme Court of the United States concerning this tax.
According to the U.S. Supreme Court in Gurley vs. Rhoden:
the Federal excise tax on gasoline is imposed solely upon
statutory producers, and not on consuming buyers.
Let me repeat that:
the Federal excise tax on gasoline is imposed solely upon
statutory producers, and not on consuming buyers.
Therefore, I assert that even the Supreme Court agrees that this tax
reduction will not go to consumers. This tax cut will go exclusively to
oil producers who will have no legal requirement to pass the cut on.
That won't help truckers in my State. It won't help farmers in my
State. It won't help small business people in my State. It won't help
average consumers.
We cannot forget that despite the fact that the administration has
successfully compelled OPEC to pump more oil, and that oil prices are
coming down, the high cost of the oil price spike will still be on the
bottom line at the end of the year.
We have to do something real and substantial for our truckers, our
farmers, and our fuel dependent small businessmen and women.
A 4.3-cent gas tax cut will do essentially nothing for anyone.
I again suggest that a suspension of the heavy vehicle use tax would
be a way to get real relief to real truck drivers. This would not drain
the highway trust fund to the degree that this gas tax cut would and it
would directly help the people who have been hurt the most by the spike
in fuel prices.
I have also advocated a short-term no-interest loan program for
diesel dependent small business, and lastly I have called for a
formalized end-of-the-year tax credit, that would take into account the
totality of this oil spike in an environment of dropping prices.
We all want to help those in need and we should consider giving tax
credits, but we should also protect the Treasury from windfalls that
could arise in this economic environment.
This bill is a bad idea, it would in effect raise the tax burden on
my constituents, and it would not help the people who are really
hurting from the high prices at the gas pump.
I urge my colleagues, especially those from Oklahoma and Nevada,
California and Tennessee, to look at how this bill will affect the tax
burden in your States. Ask how this bill will affect the bonds that
your State has issued. And most importantly, consider how little this
bill will do to help the consumers of our Nation. We can do better, and
I hope we can continue the debate on this bill so we will have that
opportunity.
The PRESIDING OFFICER. The Senator's time has expired. Who yields
time?
Mr. MURKOWSKI. Mr. President, I yield myself 3\1/2\ minutes.
In this legislation, there is full recovery to the highway trust
fund, if indeed
[[Page S2498]]
this suspension takes place. There is a balance in it, too. That
balance puts the onus on the administration to encourage that the price
remain low because if it doesn't and the price goes to $2 a gallon,
clearly what will happen is we will eliminate this tax, which is 18.4
cents.
The question has been asked, How do we ensure that it is passed on to
the consumer? That is a legitimate question. We provide in the
legislation a requirement that the GAO audit and make an issue of
anyone who breaks the trust that this differential has to be passed on
to the consumer. We have the support of the National Food Processors
Association, a letter to that effect, and support from the National
Foundation of Independent Businesses and the Independent Truckers
Association.
I ask unanimous consent that those letters be printed in the Record.
There being no objection, the letters were ordered to be printed in
the Record, as follows:
National Food
Processors Association,
Washington, DC, April 3, 2000.
Hon. Trent Lott,
Majority Leader, United States Senate, Russell Senate Office
Building, Washington, DC.
Dear Senator Lott: On behalf of the National Food
Processors Association (NFPA), the nation's largest food
trade association, I am writing to urge that Congress take
action to address rapidly rising fuel prices. From the food
industry's perspective, the effects of higher energy prices
are about to move from the gas pump to the grocery store,
threatening to put a serious crimp in the incomes of
America's working families.
You no doubt have heard from the transportation sector
about the serious effect of the 50-plus percent fuel price
increase since the first of the year. America's agribusiness
industry relies heavily on trucks and the rails to transport
food from the farm to processor and on to kitchen tables all
across the United States. Additionally, the nation's food
processors--an industry employing more than 1.5 million
workers in some 20,000 facilities across the country--consume
no small measure of energy to make available the tasty and
nutritious foods that consumers enjoy. Given the intense
competition and very small profit margins, under which most
food manufacturers operate, they are in no position to absorb
these dramatic increases in energy prices.
I believe the absence of an effective national energy
policy is largely responsible for this budding crisis.
However, there are tools available now to help address this
problem, at least for the short term. First, portions of the
Strategic Petroleum Reserve could be released, helping reduce
prices by increasing, temporarily, the supply of fuel.
Second, I encourage Congress to enact at least a temporary
suspension of the most recent 4.3-cent gasoline tax increase,
which was adopted in 1993 for the purpose of deficit
reduction. NFPA also has urged President Clinton to support
such actions.
Leadership by Congress is needed to address this serious
issue. I hope that the U.S. Senate will work with the
President to take action promptly to ease the strain of
rapidly increasing fuel costs.
Sincerely,
John R. Cady.
____
National Federation of
Independent Business,
Washington, DC, March 29, 2000.
Hon. Trent Lott,
Majority Leader,
U.S. Senate, Washington, DC.
Dear Leader: On behalf of the 600,000 members of the
National Federation of Independent Business (NFIB), I want to
express our support for Senate Bill 2285 which would
temporarily repeal the 4.3 cent excise tax on fuel, provide
additional tax relief should the cost of fuel continue to
rise, and protect funding levels in the Highway Trust Fund.
NFIB urges members to support its adoption.
Gas prices have been soaring. According to the U.S.
Department of Energy, gas prices, which have increased by as
much as 50 percent in the past year, are likely to continue
to rise into the summer, if not beyond.
These high fuel prices are hitting many Americans,
especially small businesses, extremely hard. For a small
company that consumes 50,000 gallons of diesel fuel in a
month, the increase in prices in the past year will cost that
company an additional $40,000 per month. If fuel prices
remain high, these costs could eventually be passed on to
consumers in the form of higher prices for many goods and
services. A 4.3 cent reduction in the cost of fuel would save
the company more than $2,000 per month.
Your bill goes a long way towards providing America's small
business owners valuable relief from rising fuel costs. We
applaud your proactive efforts to reduce this tax burden on
small business while at the same time providing a hold
harmless provision for the Highway Trust Fund. This will
guarantee that full funding will continue to flow to states
and local communities for planned infrastructure projects.
Mr. Leader, thank you for your continued support of small
businesses. We look forward to working with you to enact S.
2285 into law.
Sincerely,
Dan Danner,
Sr. Vice President,
Federal Public Policy.
____
Independent Truckers Association,
Half Moon Bay, CA, April 4, 2000.
Hon. Trent Lott,
Majority Leader,
U.S. Senate, Washington, DC.
Dear Senator Lott: The Independent Truckers Association--
the oldest association of the nation's long-haul independent
truckers and small fleet owners--endorses wholeheartedly the
swift passage of S. 2285, the Federal Fuel Tax Holiday Act of
2000.
This measure would temporarily repeal the 4.3 cents excise
tax on fuels and protect funding levels in the Highway Trust
Fund. We see this as an important first step to help ensure
that prices for consumer goods shipped to market will remain
stable.
It's important to recognize that truckers--not just the
independents and small fleets, but the whole industry--work
on a very small profit margin. So, the recent increase of oil
prices by OPEC, along with the failed energy policy of the
Clinton-Gore Administration, strikes deep into the heart and
wallet of America's truckers. Enacting S. 2285 today will
help those injured by excessive oil and fuel prices, and help
keep the economy rolling along.
Senator Lott, thank you for your support of American's
independent truckers. We look forward to working with you to
enact S. 2285 into law.
Very Sincerely,
Mike Parkhurst,
National Chairman.
Mr. MURKOWSKI. Some say this isn't much of a cut. Tell that to the
working man or woman who gets up at 4:30 and drives 75 miles one way to
work in this city in his pickup because the Government won't let him
work at home in the coal mines, or building roads, forests, because
they don't support resource development. It might not mean much to the
folks who can afford it, but it means a lot to the folks at home.
As a consequence, ask the public what they think. It is in a Gallup
Poll: 74 percent favor a temporary reduction of the 4.3-cent gas tax.
This is a balanced piece of legislation. It is balanced because it
would take off the Gore tax. This tax was put on as a consequence of
Vice President Al Gore breaking the tie in this body back in 1993. That
didn't go into the highway trust fund. That went into the Clinton
general fund, and the Clinton administration spent that money as they
saw fit. It was the Republican majority in 1998 that turned it around
and put it into the highway trust fund. The Clinton administration has
enjoyed $21 billion, a windfall they expended out of the general fund
for their programs.
As Senators look behind the scenes on this one, be careful because
reality dictates that this is good for the consumer. The consumers of
this Nation want it. Seventy-four percent favor the temporary reduction
of the 4.3-cent-a-gallon gas tax.
If there is anyone who has been misled by this administration and
their opinion of what is going to happen, they should have read the New
York Times today. The president of OPEC said today that if the price of
the organization's benchmark basket of crude oil remained below $22 a
barrel, the 1.5-million-barrel-a-day increase the organization agreed
to last month would be cut back by one-third.
OPEC is saying: If the price goes down below $22 a barrel, we will
cut our production. We are nowhere near home on this by any means. We
have been sold a bill of goods. Give the taxpayer a break.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. WARNER. Mr. President, in the 20-plus years I have been
privileged to serve in the Senate, this is a day I will long remember.
It is the first time I ever voted against a tax decrease in over two
decades.
I see no certainty to this program. The Senator says 74 percent favor
a temporary reduction. Why isn't it 100 percent? I know very few people
who want to increase taxes. And with all due respect to my friend, the
GAO monitoring 100,000 gas stations across America to see whether or
not it came down 4.3 cents? That I just cannot accept.
Mr. MURKOWSKI. If that is a question, I would be happy to respond.
Mr. WARNER. On your time, you are welcome to do it.
Mr. President, in all seriousness, the Senate really was a leader in
passing
[[Page S2499]]
the landmark legislation to modernize America's transportation system.
This gas tax was included in that highway fund by 80-plus Senators. It
is a foundation block for this program. Let us not bring uncertainty to
the modernization of America's transportation system by beginning to
pull a block here and a block there.
I yield the floor.
Ms. SNOWE. Mr. President, I rise today in support of the motion to
proceed to invoke cloture on S. 2285, the Federal Fuels Tax Holiday Act
of 2000, a bill introduced by Senator Lott, which I have been pleased
to cosponsor.
This legislation will repeal, until the end of this year, the 4.3
cent-per-gallon increase to the federal excise tax on gasoline, diesel,
kerosene, and aviation fuel added by the Clinton Administration in
1993.
At the same time, both the Highway Trust Fund and the Airport and
Airways Trust Fund are held completely harmless. It is a bogus argument
that the Trust Funds will be impacted by giving consumers a tax break
at the gas pump. The progress of important highway and airport projects
will not be affected because the impact would be zero. This legislation
allows for reimbursement of the Trust Funds that are financed by the
gasoline and aviation fuel taxes. For both of these funds, any lost
revenues to be replaced from the budget surplus.
Also, our legislation is set up so that should the national average
for regular unleaded gasoline prices breach the $2 mark, it would also
repeal, until the end of the year, the 18.3 cent-per-gallon federal
gasoline tax; the 24.3 cent-per-gallon excise tax on highway diesel
fuel and kerosene; the 4.3 cents per-gallon railroad diesel fuel; the
24.3 cent-per-gallon excise tax on inland waterway fuel; the 19.3 cent-
per-gallon for noncommercial aviation gasoline; the 21.8 cent-per-
gallon for noncommercial jet fuel; and 4.3 cents-per-gallon for
commercial aviation fuel.
This will provide the nation with a vital ``circuit breaker'' in the
midst of the very real possibility of high fuel costs as America takes
to the road this summer--and the legislation ensures that any savings
will truly be passed on to consumers and not pocketed before customers
can benefit from any savings at the pump.
Some of my colleagues say that repealing the 4.3 cent per gallon gas
tax will not amount to enough savings for the consumers to even care
about. Well, I guess people in Maine think differently, especially
after a winter of paying the highest prices in decades for both home
heating oil and for fuel at the pump.
This past week, the Maine legislature, both the Senate by a vote of
26-9, and the House, by a vote of 94-54, endorsed a bill that allows
for rebates to truckers for the state diesel fuel taxes they paid
between February 1 and March 15 when diesel fuel prices skyrocketed to
over $2.00 per gallon. While the funding decision now rests with the
appropriators, the Maine legislature has spoken clearly that they know
it makes a difference, especially where the trucking industry is
concerned.
I am aware of a trucking company in Maine that has lost at least
$200,000 in the last three months because of the failed energy policy
of this Administration that caused diesel prices to spike. How can an
owner buy equipment, hire people, keep his trucks rolling, and function
within a set budget for the year with losses such as these? Tell him
that temporary repeal of the federal 4.3 cent tax on diesel fuel won't
make a difference. Well, let's run the numbers.
This company has a fleet of about 50 trucks that take 200 gallons of
diesel every time you fill them up, and since these large rigs get no
more than five miles to the gallon, they get filled up quite regularly.
So, if we temporarily repeal even just the 4.3 cent federal gas tax,
every time the fleet of trucks gets filled up, the company will be able
to save at least $430, adding up to thousands of dollars a month. No
wonder hundreds of truckers drove their rigs to Washington, D.C. to
protest on two different occasions in the past month. Tell them that a
temporary repeal of 4.3 cents per gallon diesel fuel tax won't make a
difference.
Look to your own states--California, Connecticut, Florida, Illinois,
New York, Wisconsin--all around the country state legislatures are
considering their own responses to the rise in all fuel prices.
In California, there is a proposal for a four-month suspension of the
15 cent per gallon state tax. In Connecticut, the Legislature's Finance
Committee unanimously approved a seven cent per gallon state gasoline
tax over a three-year period. In New York, both parties have called for
some sort of state gas tax relief. In Illinois, the State Senate has
approved an elimination of the five percent sales tax on gasoline and
diesel fuel. Lawmakers in Wisconsin have proposed both repealing or
temporarily suspending the state gas tax.
In Florida, the Republican House Speaker has proposed a 10 cents per
gallon tax cut, saying, ``If the federal government is not going to
help the people of Florida, then we need to''.
What this legislation before you today does is take a concrete step
toward more reasonable fuel prices for everyone, helping to serve as a
buffer for consumers and businesses who are already reeling from the
high cost of gasoline and other fuels. Of course, I hope the provisions
for temporary repeal of the full tax will not be necessary. But if they
are, they will provide immediate relief to taxpayers and ensure that,
if prices are skyrocketing, any savings in fuel costs will be passed on
to the purchasers of the gasoline products.
The retail price we pay for refined petroleum products for gasoline,
diesel fuel, and home heating oil, for instance, substantially depends
upon the cost of crude oil to refiners. We have seen a barrel of crude
oil climb to over $34.00 recently from a price of $10.50 in February of
1999. That is a 145 percent increase.
While OPEC agreed last month to only very modest increases in crude
oil production, White House officials say that the cost of gasoline at
the pump will now decline in the coming months, even though their own
Economic Advisor Gene Sperling was quoted in the Washington Post on
March 29, as warning that ``there is still significant and inherent
uncertainty in the oil market, particularly with such low inventories,
and we will continue to monitor the situation very closely''.
While the Administration has ``monitored'' the situation, crude oil
prices have gone up and up, and our inventories have gone down and
down. As a matter of fact, the Administration admits that it was
``caught napping'' after OPEC decided to decrease production in March
of 1999--and while they napped through a long winter's sleep, prices
for crude climbed as temperatures and inventories plummeted.
The effect on gasoline, diesel and home heating oil was predictable,
and in fact was predicted. Last October--a half a year ago--the
Department of Energy, in its 1999-2000 Winter Fuels Outlook, projected
a 44 percent increase in home heating oil bills. In a severe winter,
the agency estimated, an additional 28 percent increase in costs could
be felt for residential customers.
In other words, the Department of Energy itself predicted an increase
of over 70 percent, but did nothing. In actuality, home heating oil
costs jumped from a fairly consistent national of 86 cents per gallon
in the winter of 1998-99 to as high as $2.08 per gallon in Maine early
last month--an increase of well over 100 percent. In that same time
frame, conventional gasoline prices rose 70 percent or higher.
So now the Administration tells us that gasoline prices will most
likely go down by this summer because of the small production increases
agreed to by OPEC. Even with an increase in OPEC quotas, there will
still be a shortfall in meeting worldwide demand for crude oil.
Approximately 76.3 million barrels per day are needed to meet demand,
but the anticipated new OPEC production is estimated to be only 75.3
million barrels per day. So you'll have to excuse me if I'm a little
hesitant accepting estimates from an Administration that seems to make
predictions while their gauge is on empty.
The Administration's projections of an average of $1.46 per gallon
for gasoline this summer--which is still 25 percent higher than last
summer I might add--does not presume production disruptions at the
refinery. I would like to point out that one of the reasons prices went
up and supply ran dangerously low a few months ago was the unexpected
shutdown of four different refineries that serve the Northeast.
[[Page S2500]]
Just last week, DOE's Energy Information Administration stated that,
``. . . motor gasoline markets are projected to exhibit an
extraordinarily tight supply/demand balance.'' Against this backdrop,
we cannot depend upon the Administration's predictions turning into
fact, when they have so far been so incorrect.
Now is the time for Congress to act, even if the Administration
refuses to. I want to at least make sure that American businesspeople
and consumers have in their pockets what they would have otherwise paid
in fuel taxes if the Administration is underestimating prices once
again and gasoline hits $2.00 a gallon.
Beyond the pump, consumers are getting hit with extra costs directly
attributable to high fuel costs. If you've paid to send an overnight
package lately, you probably noted that you were charged a surcharge--a
fuel fee--because their cost of diesel fuel has increased by about 60
percent over the past year. And with a 150 percent increase in jet
fuel, that airline ticket you buy today will probably include something
you've never seen before--a fuel charge of $20.00. How long will it be
before costs of other products will also be passed on the consumer?
Consider the impacts to the nations' farmers. In some locations, the
planting season has begun. The New York Times reported two weeks ago
that a farmer paying 40 cents a gallon more this year to fuel his
diesel tractors and combines, will be adding as much as $240 a day to
his harvesting costs. In my home State of Maine, we are at the peak
season for moving last year's potato crop out of storage and to the
large Eastern markets. But the industry still can't get truckers to
come into the State to move the potatoes because they are discouraged
by the particularly higher price of diesel in Maine.
The only help the potato industry has had recently in getting their
product to market was certainly not due to the energy policy of this
Administration, but to local truckers who turned to hauling potatoes
because wet weather kept them away from taking timber out of the Maine
woods.
Soon, we will enter the summer months, when tourism is particularly
important to the economy of New England and to Maine in particular.
With the high price of gasoline, we need relief now, and that's what
this bill provides. As a matter of fact, we could have used the relief
in Northern Maine a few months ago--that's a big tourist season for
them as snowmobilers from all over the East head to Maine to use the
hundreds of miles of trails throughout the northern part of the State.
The choices are clear--do nothing for the taxpayers who are being
gouged by failed energy policies, or do something by supporting
legislation that gives some relief at the gas pump right now. We should
temporarily repeal the 4.3 cent per gallon gas tax and support a bill
that also acts as a circuit breaker, giving citizens a break at the gas
pump if gas goes over $2.00 a gallon while protecting the Trust Funds
that build our highways and airports. I urge my colleagues to support
this bill by voting for cloture.
Mrs. FEINSTEIN. Mr. President, I am as upset by the gasoline price
spikes as anyone else. Price spikes have been worse in California than
in any other State. Today, as I speak, though prices have recently
started to come down a bit, they still average more than $2 per gallon
in some parts of California.
Having said that, I feel obliged to oppose S. 2285, despite
understanding the sentiment behind it. The problem with S. 2285 is that
there is no way to guarantee that a reduction in the federal gasoline
tax will be passed on to consumers. Why is this? Because price is a
function of supply and demand, not taxes. And right now, world oil
markets are extremely tight, so prices are high.
The way to relieve the pressure on the market is to boost supply and
reduce demand.
With regard to supply, fourteen nations sell oil to the U.S. under a
cartel known as the Organization of Petroleum Exporting Countries,
OPEC. Like any monopoly, OPEC controls the price of oil by limiting
supply. Decreased production in non-OPEC countries like Venezuela,
Mexico, and Norway has also contributed to the squeeze.
Since OPEC is not bound by U.S. law, there are only a few things the
U.S. can do to encourage the cartel to increase supply. The preferred
alternative is diplomacy. Energy Secretary Bill Richardson has had some
success on this front. OPEC ministers announced last month that the
cartel would immediately increase supply by 1.7 million barrels a day.
Mexico has also agreed to increase production by a small amount.
It takes several weeks for production increases to be felt at the
pump, in lower prices. And California has unique problems affecting its
supply. No other State requires the kind of reformulated gasoline that
California does. So the gasoline has to be refined in California. And
California refiners have had problems--including two fires--operating
their plants at full capacity. They are at full capacity now.
Notwithstanding these problems, the announcement of OPEC production
increases has driven spot gasoline prices down. They have dropped more
than 40 cents, for instance, in the greater Los Angeles area.
The spot price is the price of gasoline on the open market without
taxes and other markups figured in. Spot prices are usually good
harbingers of the price movement we will eventually see at the pump
about a month or two later.
But the increase in OPEC production is, at best, a short-term
solution. By the middle of summer when demand for gasoline will peak,
we may be back in the same predicament.
As I said a moment ago, S. 2285 doesn't solve the problem of high
gasoline prices. Under California law, if the federal gasoline tax
drops by 9 cents per gallon or more, then the State tax automatically
rises to off-set the federal decrease. The law is designed to protect
the Highway Trust Fund. I have spoken with members of the California
legislature about this. They do not seem inclined to change the law.
Even if the law were changed, the price still wouldn't drop. At least
that's what the chief executive officers of the three major California
refiners told me. Collectively, they produce 70 percent of California's
gasoline. None could guarantee that prices would drop at the pump. They
cited the fundamental problem with supply, and also pointed out that
they have no control over other entities in the supply chain.
What are our options?
The fact is, we have limited control over supply. Too much of the
world's oil is produced elsewhere. The one thing we can control is
demand.
The best way to reduce demand is to require that sports utility
vehicles (SUVs) and light duty trucks get the same fuel efficiency that
passenger vehicles do. If SUVs and light duty trucks had the same fuel
efficiency standards as passenger cars, the U.S. would use one million
fewer barrels of oil each day.
This is roughly equal to the U.S. shortfall before OPEC increased
production.
The Department of Transportation is responsible for setting fuel
efficiency requirements under the Corporate Average Fuel Economy (CAFE)
program. Abut two-thirds of all petroleum used goes to transportation,
so boosting fuel efficiency is an important way to wean ourselves off
OPEC oil and reduce the price motorists pay for gasoline. Consider,
too, the significant environmental and health benefits of higher fuel
efficiency.
But CAFE standards have not increased since the mid- 1980s. And the
situation is made worse by a loophole in the CAFE regulations. SUVs and
light duty trucks--which are as much passenger vehicles as station
wagons and sedans--are only required to average 20.7 miles per gallon
per fleet versus 27.5 miles per gallon for automobiles.
Since half of all new vehicles sold in this country are fuel-thirsty
SUVs and light duty trucks, this stranglehold on energy efficiency has
produced an American fleet with the worst fuel efficiency since 1980.
We are going backwards!
According to the non-partisan American Council for an Energy
Efficient Economy, the U.S. saves 3 million barrels of oil a day
because of CAFE standards. Close the SUV loophole, as I said a moment
ago, and save another million barrels each day.
Overall, SUV and light duty truck owners spend an extra $25 billion a
year
[[Page S2501]]
at the pump because of the ``SUV loophole.'' Making SUVs and light duty
trucks get better gas mileage would save their owners some $640 at the
pump each year when the price of gasoline averages $2 per gallon.
The ``bottom line'' is that eliminating some or all of the federal
gasoline tax won't lower prices at the pump. The best way to do that is
to reduce our demand. The best way to reduce demand is to increase the
gas mileage requirements for SUVs and light duty trucks.
Mr. GRAMS. Mr. President, like many of my colleagues, I've come to
the Senate floor on a number of occasions in recent weeks to express my
concern with rising fuel costs and the lack of an energy policy by this
Administration. I don't have to remind my colleagues how the rising
cost of oil threatens almost every aspect of our economy and
communities. Senior citizens on fixed incomes cannot absorb extreme
fluctuations in their energy costs. Business travelers and airlines
cannot afford dramatic increases in airline fuel costs. Families
struggling to feed and educate their children cannot withstand higher
heating bills, increasing gasoline costs, or the domino effect this
crisis has on the costs of goods and services. To be sure, this problem
is impacting virtually every facet of American life and may only get
worse as we approach the high energy demand of the summer months.
I look at the situation we're now facing with high oil prices and
limited supply and have a hard time understanding why it's such a
surprise to so many people. I've heard Secretary Richardson refer to
the fact that the Energy Department may have been caught ``napping on
the job.'' Since coming to Congress in 1993, I've been saying the
Energy Department is asleep at the wheel. We have an Energy Department
that spends less than 15% of its budget, and even less of its time, on
the core energy issues within the Department. I dare say that energy
consumers are the last thing they think about over on Independence
Avenue--certainly not the first.
With all due respect to Secretary Richardson, I don't think he was
necessarily caught napping on the job, but flat out neglecting the
energy needs of this country. Under the tenure of the last three
Secretaries of Energy, this Administration has done nothing but weaken
our energy security, increase our reliance on foreign oil, shut down
domestic oil and gas production, and ensure the closure or removal of
many of our primary means of electricity generation--coal, nuclear, and
hydropower. I think it's time that policy-makers in Washington come to
the realization that we are now a nation with no energy policy and no
ability to respond to even the most limited energy supply disruptions.
Consider the recent effort of the Administration to address the oil
price crisis. We've all witnessed this Administration's ``tin-can
diplomacy'' over the past few weeks. Instead of planning for the energy
needs of our country, this Administration waits for a crisis and then
responds by sending its appointees to grovel, plead, or otherwise beg
other nations into helping us out. The United States, thanks to this
Administration, is a nation running around the world looking for a
handout from friend and foe alike.
It's embarrassing that the economy of our nation hinged on the
decision of a few oil ministers sitting in a room in Vienna just a
couple of weeks ago. Do we realize that Iran was blocking an OPEC
increase of 1.7 million barrels of oil a day? The strength of our
economy now may rest on the ability of OPEC oil ministers to convince
countries like Iran to help us out in the future. That is quite a
statement on the viability of the Clinton Administration energy policy.
But still, this Administration maintains its steadfast opposition to
doing anything here in the United States to dramatically decrease our
reliance on foreign oil and increase our domestic exploration and
production. ANWR is off-limits. They don't want to discuss off-shore
drilling. They claim they're open to looking at some activity on public
lands, but at the same time they're on a blitz to lock up every last
acre of land they can find into some type of new, restrictive
designation before President Clinton and Secretary Babbitt leave
office.
Well, the farmers of Minnesota can't wait for President Clinton or
Secretaries Babbitt or Richardson to leave office before our country
places a renewed emphasis on a sound, long-term energy policy. Truckers
across America cannot wait for President Clinton to leave office to get
some relief at the fuel pump. And energy consumers far and wide cannot
stand by while this Administration begs countries like Iran and Libya
to ``feel our pain.''
Regrettably, I fear the oil supply and price crisis we're now
experiencing is only an early warning of the pain the Clinton
Administration's neglect of energy policy is going to level on American
energy consumers. It won't be that far into the future before this
Administration's appetite for closing down nuclear and coal-fired power
plants and destroying hyrdopower facilities will bring similar price
increases for electricity consumers.
Many of us have suggested that we need to look closely at both short-
and long-term approaches to easing the pain of the current oil crisis
on American energy consumers and reducing our nation's reliance on
foreign oil. I've spoken at length about how we need to focus our
efforts on developing a long-term energy policy that puts American jobs
and productivity first, instead of last. Doing so, however, will take
time and produce few immediate results to help consumers in the coming
months.
In the short-term, I believe Congress must consider temporarily
suspending some or all of the federal fuel taxes, which, along with
state excise taxes, account for an average of 40 cents per gallon of
gasoline. That is why I've joined Majority Leader Trent Lott, Senator
Larry Craig and a number of my colleagues in offering S. 2285--The
Federal Fuels Tax Holiday Act of 2000. Our legislation would
temporarily suspend the 4.3 cent tax on gasoline, diesel fuel, and
aviation fuel while protecting both the Highway Trust Fund and the
Social Security surplus. The bill will suspend the 4.3 cent tax
starting on April 16 through January 1, 2001. For farmers, truckers,
airlines, and other large energy consumers, this action will have an
even greater positive impact on the large amounts of fuel they consume.
This legislation reflects the leadership of a number of our
colleagues. Senator Ben Nighthorse Campbell from Colorado has
championed legislation to suspend the diesel fuel tax. Once a trucker
himself, Senator Campbell has led the way in assisting truckers and
their families who are suffering as a result of the rising price of
diesel fuel. And Senator Murkowski, as Chairman of the Senate Energy
Committee, has been a leader in calling attention to the growing energy
needs of our nation and the Administration's energy policy failures.
I want to add that I'm very aware that many of my colleagues have
argued that 4.3 cents a gallon has a negligible impact on consumers. To
them, I say look at the amount of fuel a farmer or trucker consumes
during an average week. Look at the diesel fuel required to operate a
family farm or deliver products across this country. Or look at the
tight profit margins that can make the difference between going to work
and being without a job. I'm convinced this action is going to help
farmers, businesses, truckers, and families in Minnesota and that's why
I strongly support it.
I firmly believe that federal gas taxes should go to the Highway
Trust Fund for road, highway and bridge improvements. That's why we're
restoring revenues being provided to energy consumers by the 4.3 cent
gas tax suspension. The Highway Trust Fund will be reinstated with non-
Social Security budget surplus funds from the current fiscal year as
well as fiscal year 2001. In addition, no highway projects or airport
projects will be delayed or jeopardized, because funds going into the
trust fund are fully restored by the surplus. There will be no impact
on these projects.
If gas prices reach a national average of $2 a gallon for regular
unleaded gasoline, federal excise gas taxes would be suspended, again
without impacting the Highway Trust Fund in any way. This would
suspend, until the end of the year, the 18.4 cents per gallon federal
gasoline tax, the 24.4 cents per gallon tax on highway diesel fuel and
kerosene, the 19.4 cents per gallon for noncommercial aviation
gasoline, the 21.9
[[Page S2502]]
cents per gallon for noncommercial jet fuel, and the 4.4 cents per
gallon for commercial aviation fuel.
Let me make this very clear: we are not going to raid the Highway
Trust Fund with this legislation. In fact, we've ensured that the non-
Social Security budget surplus will absorb all of the costs of the gas
tax reduction. I also want to assure my colleagues and my constituents
that this legislation walls off the Social Security surplus. We will
not spend any of the Social Security surplus to pay for the gas tax
reduction.
Our legislation is quite simply a tax cut for the American consumer
at a time when it's needed most. We're going to use surplus funds--
funds that have been taken from the American consumer above and beyond
the needs of government--and give them back to consumers every day at
the gasoline pumps. This legislation takes concrete steps toward more
reasonable fuel prices, helping to serve as a buffer for consumers who
are already feeling the impact of the high cost of gasoline and other
fuels.
In closing, I want to say that I look forward to working with my
colleagues in the coming days, weeks and months in forging a number of
both short-term and long-term responses to the needs of farmers,
truckers, the elderly, and all energy consumers. I've been a strong
supporter of renewable energy technologies and increased funding for
the Low Income Home Energy Assistance Program or LiHEAP. I strongly
support the efforts of my colleagues to increase domestic oil and gas
exploration and production. I remain committed to finding a resolution
to our nation's nuclear waste storage crisis--a crisis that threatens
to shut down nuclear plants and further weaken our nation's domestic
energy security. And I'll continue to be one of the Senate's strongest
critics of the Department of Energy's unconscionable neglect of the
long-term energy needs of our nation.
Mr. KYL. Mr. President, I rise today to speak in support of S. 2285,
the Federal Fuels Tax Holiday Act of 2000. Our country is in dire need
of a comprehensive energy policy, including a strategy to reduce fuel
prices. Immediately suspending the 4.3 cent per gallon Clinton/Gore gas
tax is one thing we can do in the short-term to provide some relief
from the high fuel prices we have been experiencing.
S. 2285 would further suspend all but 0.1 percent of federal excise
taxes on fuels if the national average price of a gallon of regular
unleaded gasoline rises to $2. While I fully support this concept, we
should consider doing more. I have cosponsored legislation in the past
that would permanently repeal all but two cents per gallon of the
federal gas tax, allowing states to make up the difference if they
choose to fund their own highway-construction needs.
Mr. President, we Arizonans have been sending more gas tax revenues
to Washington than we receive back in federal highway funds. For
Arizona, and other so-called donor states, repeal of the federal tax
would either mean significant tax relief or, if the state does increase
its own tax, more dollars actually spent on highway improvements in-
state. It is time to divest the federal government of this authority,
and give it back to the states where it rightfully belongs.
To ensure our energy security in the long-term, we also need a
strategy for reducing our dependence on imported oil. Today we are
extremely dependent on other countries for our oil--56 percent comes
from foreign sources. While our imports are rising, domestic production
is decreasing. In just the last decade, U.S. production has declined 17
percent. At the same time, our consumption has increased 14 percent.
Unfortunately, we are moving in the direction of greater dependence on
foreign oil, not less.
To reverse this trend we need to stop the decline in domestic
production, which can only be done by increasing access to lands with
high potential for oil and gas resources. Of course this can, and must,
be done in an environmentally sensitive manner. While extraction should
be part of a larger energy strategy, including the development of
alternative fuels, and conservation efforts, it is a critical
component. Increasing domestic production will help reverse our rising
reliance on imported oil, and will boost supply, thereby lowering
prices.
Mr. CAMPBELL. Mr. President, I intend to vote for cloture this
afternoon on the Federal fuels tax holiday bill to help address the
soaring cost of fuel and our rising dependency on foreign oil. We have
had numerous hearings and many statements have been given on the floor
to address this grave situation we are in. Unfortunately, it seems like
we are going to have to endure this problem for a while longer.
Over the last few weeks, I have had many conversations with truckers,
shippers, and concerned citizens about how this problem affects them.
Specifically, my conversations boiled down how this crisis affects our
American truck drivers. Over 95 percent of all commercial manufacturing
goods and agricultural products are shipped by truck at some point. 9.6
million people have jobs directly or indirectly related to trucking. In
addition, trucking contributes over 5 percent of America's gross
domestic product which is the equivalent of $372 billion to the
economy.
Along with these astonishing facts about trucking, here are some more
facts about this fuel crisis:
fuel taxes account for about 28 percent of what you pay for a gallon
of gas at the pump;
the government imposes 43 different direct and indirect taxes on the
production and distribution of gas, bringing the total burden to 54
percent of the price of a gallon of gas;
U.S. oil production is down 17 percent from 1992, consumption is up
14 percent;
DOE estimates the United States will use 65 percent foreign oil by
2020;
the United States spends $300 million per day, and $100 billion per
year on foreign oil;
and oil makes up one-third of our trade deficit.
I know what our truckers are going through. I put myself through
college driving a truck and I just recently got my Colorado commercial
driver's license so that I could get back into driving. Since I own a
small rig, I know firsthand how the fuel crisis impacts those who
depend on it. My fuel bills have doubled in the last year alone.
Hundreds of truckers from all over have come to Washington to ask for
help on three different occasions in the last few weeks. One thing I
have learned is that when many private citizens give their time to come
to Washington, the issue is not profit margins, or stock prices, it is
because they are fighting for their families' very livelihood.
I met a man named Wesley White from Oregon, who said he was on his
last run. He could not afford to continue fueling his truck. He has
spent his pension to buy the truck, but when he gets home, he's parking
it for good. Without the income derived from delivering goods he will
not be able to make truck payments and will lose the truck. Another
trucker I met was living with his wife and two small children in the
truck sleeper because the increase in diesel costs did not leave them
enough money to pay their house rent.
Unfortunately, the administration has ignored the plight of these
hard working Americans. This administration got us into this mess by
their total lack of an energy policy. They stand in the way of domestic
oil production by locking up public lands and refuse to release federal
fuel stockpiles already in place.
Now, faced with skyrocketing diesel prices, they still do nothing of
substance, instead they wanted to wait for OPEC to meet in Vienna which
happened on March 27 and 28 of this year, hoping that the outcome would
be favorable for the U.S., which is debatable. But can we trust this
outcome when the U.S. has sanction on 8 out of the 11 OPEC nations?
Recently, the Energy Secretary went to the Middle East with hat in
hand, to beg for fuel. He claims that this increase in oil production
will lower fuel costs by approximately 11 cents by the end of the
summer. Well, what do we do until then? The crisis is happening now.
Also administration officials come before Congress to propose studying
alternative energy sources, which is fine, but I have news for them:
Trucks today run on diesel, not wind or solar power. Everything we buy
to eat and wear comes on a truck. If the trucks stop rolling, this
Nation stops rolling.
[[Page S2503]]
The benefits from this recent increase in oil production will not be
seen for months. We need solutions now before any more Americans lose
their jobs because of high fuel prices.
I am pleased the pending legislation includes a provision which is
similar to a bill I introduced more than a month ago on March 2, S.
2161 the American Transportation Recovery and Highway Trust Fund
Protection Act of 2000. My bill would temporarily suspend the federal
excise tax on diesel fuel for one year or until the price of crude oil
is reduced to the December 31, 1999 level. It would replace the lost
revenues with monies from the budget surplus in the general fund, while
protecting the Highway Trust Fund. S. 2161 is endorsed by the American
Trucking Association, the Independent Truckers Association, and the
Colorado Motor Carriers Association to name just a few.
The provision in the pending legislation states that in the event the
national average price of unleaded regular gasoline rises to $2 per
gallon or more, it would further suspend all federal excise taxes on
fuels, while retaining only the 0.1 percent portion devoted to Leaking
Underground Storage Tanks Trust Fund. I believe this action would be an
important step forward to help relieve the escalating burden on
America's truckers and farmers.
But, these bills are only short-term solutions, and only one step
which could be taken. Our real problem is our dependence on foreign
oil. In 1973, the year of the Arab oil embargo, the U.S. bought 35
percent of its oil from foreign sources. Today, we buy 56 percent, by
some reports 62 percent. All the negotiations the administration is
doing to get OPEC to open the spigots is not more than a band aid
approach to a problem that will continually revisit us as long as we
are dependent on foreign oil. It is unfortunate that we, a global
superpower, are reduced to begging, and now we have to take what we can
get from OPEC. More forceful actions need to be taken to expose the
severity of this problem and address it now, not in the months to come.
We cannot stand by and do nothing of consequence while good people lose
their means of support.
The Federal fuels tax holiday bill is an important step forward to
provide relief to hard working Americans from the burden of rising fuel
prices, and I urge my colleagues to support cloture so we can pass this
bill.
I thank the Chair and yield the floor.
Mr. ROCKEFELLER. Mr. President, I wish to take this
opportunity to explain why I missed the vote on the motion to invoke
cloture on S. 2285, the Federal Fuels Tax Holiday bill, and more
importantly, to explain why I would have voted against cloture on this
bill.
I had to be absent for this vote because I was traveling to Taiwan,
where I became the first Member of the U.S. Congress to visit its newly
elected leadership. I made the trip to discuss and reinforce Taiwan's
close economic ties with my state of West Virginia, and to relay our
country's interest in Taiwan and its continued stable relations with
China.
Had I been in Washington, DC, for this vote, I would have most
assuredly voted against it. I would have opposed cloture for a number
of reasons, including my philosophical opposition to the frequent use
of the cloture procedure by the majority to foreclose Democratic
initiatives. However, I was happy to see that this cloture motion
failed because of more substantive concerns. Quite simply, this bill
represents bad tax policy, bad energy policy, and bad transportation
policy, all dressed up in an election year wrapper.
Proponents of the gas tax ``holiday'' would have us believe that this
bill--which would have cut more than $200 million in federal highway
money for West Virginia--was offered to do something about the recent
price increases for gasoline and other fuels. Petroleum products are
taxed at the refinery, not at the pump, and consumers would not have
seen any of the savings passed through to them. Consumers in some
states would even have seen their state gasoline tax go up in response
to the federal tax going down. The effect of this bill would have been
the creation of a windfall for oil companies and middlemen, with West
Virginians still paying much more than the national average for a
gallon of gas.
Mr. President, I would like to briefly discuss some of the problems
with this legislation. The proposed 4.3 cent reduction would translate
to more than $4 billion in lost revenue that would otherwise go to the
Highway Trust Fund. The complete elimination of fuel taxes that would
have been triggered by the price of gas going above $2.00 would explode
that shortfall to more than $20 billion--all to be made up from a
surplus that some would argue does not exist. These funding reductions
would have put hundreds of thousands of Americans out of work,
jeopardized projects to upgrade our aging transportation
infrastructure, and put millions of highway users at risk.
In addition to the severe cutback in the highway funding mechanism,
which we were so happy to put in place two years ago with the passage
of TEA-21, the impact of the fuel tax repeal would have left the
Airport and Airway Trust Fund under-funded to the tune of about $700
million a year. The effect on airline passenger safety, and on airport
construction and maintenance projects, would be devastating.
Repeal of the gasoline excise tax would have eliminated the tax
incentives we in Congress have instituted to expand the use of
alternative fuels. Without the general excise tax from which to
partially exempt alternative or blended fuels, there would be no
realistic means of bringing our nation into compliance with fuel
diversity standards we have previously worked to put in place. As this
temporary worldwide shortage of gasoline demonstrates so painfully at
the pumps, the United States needs an energy policy that weakens the
grip of foreign suppliers.
Finally, Mr. President, I would like to comment on an earlier cloture
vote on this issue. On March 30 I voted for the cloture motion on the
motion to proceed to this bill. I voted this way not because I
supported the gas tax repeal, but precisely because I thought the
Senate should proceed to consideration of the bill, so that its many
faults could be debated, and the bill could be voted down.
Mr. BYRD. Mr. President, in response to the inquiry from the senior
Senator from Virginia, Mr. Warner, I would like to pass on my views on
the intent and impact of Section 1(f)(4) of S. 2285. This provision, as
Senator Warner pointed out, is indeed unprecedented in the history of
the law governing the Highway Trust Fund. As I read this provision, it
is an attempt to make up for the losses in deposits that would occur to
both the Highway and Airport and Airway Trust Funds as a result of a
reduced fuel tax in this bill with transfers from the general fund of
the Treasury. As has been pointed out by other Senators during debate
on this bill, the legislation does not state with specificity how this
diversion of general funds is to occur. It is not clear whether these
general funds would be derived from the non-Social Security surplus or
be required to be diverted from other areas of federal spending.
Finally, Mr. President, I would like to recognize the excellent staff
work of Ann Loomis of Senator Warner's staff, Ellen Stein of Senator
Voinovich's staff, Tracy Henke of Senator Bond's staff, Mitch Warren of
Senator Lautenberg's staff, Tom Sliter and Dawn Levy of Senator Baucus'
staff, as well as Peter Rogoff, of my Appropriations Committee staff,
on this effort.
Mr. President, I ask unanimous consent that letters of support from a
number of interest groups be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The Associated General
Contractors of America,
Alexandria, VA, April 10, 2000.
Hon. Robert C. Byrd,
U.S. Senate,
Washington, DC
Dear Senator Byrd: The Associated General Contractors of
America (AGC) greatly appreciates your vote in favor of the
Byrd-Warner-Baucus-Voinovich-Lautenberg-Bond Sense of the
Senate Amendment to the Budget Resolution. Your vote in
support of not tampering with the federal gas tax and the
Highway Trust Fund demonstrates your commitment to improving
our nation's highways, bridges and transit systems.
The amendment, which was overwhelmingly approved by the
Senate 66 to 34, declares the Senate's support for
maintaining the current level of federal motor fuels taxes.
The Senate has consistently rejected efforts to repeal
portions of the federal gas tax. In 1998, 72 sitting Senators
voted against
[[Page S2504]]
repeal of the 4.3-cent gas tax. The next day, the entire
Senate voted to spend the 4.3 cents for badly needed highway
and transit improvements.
It is imperative that the Senate continues to oppose any
efforts to reduce the federal gasoline taxes on either a
temporary or permanent basis. These user fees save lives,
reduce congestion and create thousands of American jobs. Any
reduction or suspension of the federal gasoline tax threatens
to erode the spending levels guaranteed in the Transportation
Equity Act for the 21st Century (TEA-21). Moreover, the
reduction in gasoline taxes provides no guarantee that
consumers will experience any reduction in the price at the
pump.
Again, thank you for your support of the Byrd-Warner-
Baucus-Voinovich-Lautenberg-Bond Sense of the Senate
Amendment to the Budget Resolution. Please continue to help
defeat any efforts to reduce the federal gasoline taxes and
preserve the integrity of the Highway Trust Fund.
Sincerely,
Jeffrey D. Shoaf,
Executive Director,
Congressional Relations.
____
American Road & Transportation
Builders Association,
Washington, DC, April 7, 2000.
Hon. Pat Roberts,
U.S. Senate,
Washington, DC.
Dear Senator Roberts: On behalf of the 5,000 members of the
American Road and Transportation Builders Association
(ARTBA), thank you for your April 6 vote in support of the
Byrd-Warner-Baucus-Voinvoich-Lautenberg-Bond Amendment to the
proposed FY2001 budget resolution.
We greatly appreciate you going on record in opposition to
efforts to repeal or suspend the federal motor fuels tax in
response to rising gas prices. We have notified our members
in your state that you voted to support retaining the current
federal motor fuels tax and sent a strong signal against
proposals that would place funding for state highway and mass
transit improvement programs at risk.
Unfortunately, this issue may come before the Senate again
the week of April 10. We understand S. 2285, or some
variation thereof, may be brought to the Senate floor in the
near future as a stand-alone bill or as an amendment to other
legislation. S. 2285 would temporarily repeal 4.3 cents of
the federal motor fuels tax from April 15, 2000, through
January 1, 2001. The bill would repeal the entire 18.4 cents
federal gas tax if the national average price for a gallon of
gasoline rises above $2.00. The bill proposes to use the
``on-budget surplus'' to ``reimburse'' the more than $20
billion that could be lost to the Highway Trust Fund under
this scheme.
We hope you will vigorously oppose S. 2285 or like
proposals.
This bill introduces uncertainty and risk into state
highway and mass transit funding. Federal investment in these
areas is already guaranteed under TEA-21. There is no need to
risk this guarantee for a promise that things will be taken
care of using the ``on-budget surplus.''
The fact is, S. 2285 could utilize the entire FY 2000 ``on-
budget surplus.'' According to the Senate Budget Committee's
Informed Budgeteer, the Congressional Budget Office has re-
estimated the FY 2000 ``on-budget surplus'' to be $15
billion. Repealing the entire federal gas tax from April 15
to September 30--a possibility under S. 2285--would cost the
Highway Trust Fund approximately $15 billion.
This would leave no room for other Republican or Clinton
Administration budget priorities . . . or for using the
``surplus'' to pay down the national debt . . . or to protect
Social Security and Medicare. The House has already adopted a
supplemental appropriation bill for FY 2000 that would tie-up
$16.7 billion of the ``on-budget surplus''! The proposed
supplemental is but one of many measures that would utilize
the ``on-budget surplus.''
Again, we thank you for your vote April 6. We need you to
be with us again in opposition to S. 2285.
Sincerely,
T. Peter Ruane,
President & CEO.
____
AAA Washington Office,
Washington, DC, April 4, 2000.
Hon. Robert C. Byrd,
U.S. Senate,
Washington, DC.
Dear Senator Byrd: AAA is pleased to lend its support to
your amendment to the Senate budget resolution, S. Con. Res.
101, expressing the ``Sense of the Senate'' that the federal
gasoline tax should not be reduced or repealed.
AAA has serious concerns about efforts to suspend or repeal
any portion of the federal excise tax on gasoline. While
attractive at first glance, this course of action will do
little to address the root cause of our gasoline price
problem today, which is a shortage of supply caused by
curtailed production of crude oil by OPEC member nations.
The benefit to motorists from reducing the gas tax is, at
best minimal--repealing 4.3 cents would amount to about $1/
week for the average consumer. However, as your amendment
points out, the resulting loss of revenue to the Highway
Trust Fund would be disastrous to the important work of
fixing the nation's highways and bridges and improving
safety.
It is highway and traffic safety that is of most concern to
AAA. Lower receipts to the Highway Trust Fund compromise the
safety of the traveling public. We take these roads back and
forth to work and on vacations, our children take these roads
to school, and our public safety officials use these arteries
to respond to emergencies.
Asking Americans to choose between a gas tax reduction and
safety is posing the wrong question. The right question is:
How should Congress and the Administration manage an energy
strategy that reduces dependence upon a foreign cartel? That
way motorists would have the safe highways they've paid for
through their gas taxes and an oil supply they can rely on.
Short-term fixes, while politically popular, are not in the
best interests of highway safety and the overall economic
well being of the nation.
Congress made a very important decision by creating the
Highway Trust Fund and establishing the direct link between
user fees paid by motorists and trust fund monies dedicated
to improving the nation's surface transportation. Because of
TEA-21, the trust fund is now dedicated to providing
Americans the safe and efficient transportation system on
which they have paid and on which they rely.
Again, AAA appreciates your continued leadership on
transportation issues and is pleased to support your
amendment.
Sincerely,
Susan G. Pikrallidas,
Vice President,
Public & Government Relations.
____
Construction Industry
Manufacturers Association,
Washington, DC, April 7, 2000.
Hon. Pete V. Domenici,
U.S. Senate,
Washington, DC.
Dear Senator Domenici: The Construction Industry
Manufacturers Association (CIMA) thanks you for your support
of the amendment to S. Con. Res. 101 to oppose a reduction of
federal fuel taxes. CIMA is the full service, innovative
business resource for over 500 construction equipment
manufacturers and services providers.
CIMA's membership was alerted to this amendment and
actively lobbied for a favorable vote. The bipartisan support
for the amendment demonstrates that an overwhelming majority
of the Senate supports the user fee concept to build and
maintain our nation's roads, highways and bridges.
A reliable transportation infrastructure is essential to
maintain the strength of the U.S. economy and for the
American public to enjoy safe and efficient modes of travel.
CIMA thanks you for your support.
Sincerely,
Dennis J. Slater,
President.
____
Laborers' International Union
of North America,
Washington, DC, March 28, 2000.
Dear Senator: On behalf of the more than 800,000 members of
the Laborers' International Union of America, I am writing to
urge you to oppose any effort to temporarily repeal the
entire 18.4 cents per gallon gas tax to offset the recent
increases in the price of gasoline, diesel and aviation fuel.
While a repeal of the gas tax would most certainly result in
less spending on transportation infrastructure, safety
programs and job losses, there is simply no guarantee that it
would result in lower prices at the pump.
The current plan likely to be considered on the Senate
floor proposes to suspend the 4.3 cents gas tax immediately.
However, even if the 4.3-cents tax is suspended, few
consumers will likely see savings at the pump for at least
two reasons. First, the tax is not actually imposed at the
gas pump; rather it is collected shortly after it leaves the
refinery. The fuel can pass through several middlemen before
it reaches the consumer. None of these middlemen would have
to pass along the savings. Those supplying the fuel could
simply keep the reduced tax. Past experience has shown that
as the wholesale cost of fuel goes up, prices at the pump
increase. Decreases in fuel taxes, however, have not
necessarily been passed on to motorists and motor carriers.
Several years ago, Connecticut reduced their state fuel tax
but it did not translate into a price cut for consumers. As
the Hartford Courant noted in 1997, after prices failed to
come down.
``Gas taxes and prices are not connected in an ironclad
way. The tax can be cut, but the benefits to consumers will
be swallowed up in higher prices at the pump. In the future,
the governor and legislature should build tax policy on a
firmer foundation.''
Secondly, some states, such as California, have laws that
automatically increase the state fuel tax with any reduction
in the federal fuel tax. In those states, the consumer would
realize no tax savings at all.
The new Senate plan calls for funding the gas tax repeal
out of the budget surplus, a proposal that would supplant
other legislative priorities. In 1997, Congress transferred
the revenue from the taxes imposed on highway users to the
Highway Trust Fund to help pay for highway and transit
infrastructure, and for highway safety programs. The 4.3-cent
tax on gasoline and diesel brings in $7.2
[[Page S2505]]
billion to the Highway Trust Fund annually--$5.8 billion for
highways and $1.4 billion for transit. When Congress passed
the TEA-21 bill, it established a direct link between these
funds and the funding returned to the states and cities for
highways and transit. Under TEA-21, all highway programs--
highway construction, highway safety, transportation
enhancements and high-priority projects--are decreased
proportionally if tax revenues fall. Using the budget surplus
for transportation puts highway construction, highway safety
and transit programs at risk when Congress reauthorizes them
in 2003, because the funding levels in TEA-21 will not be
sustainable without a tax increase or continued transfers
from the General Fund.
In essence, repealing the gas tax could reduce spending for
highway construction, transit and other transportation
infrastructure programs and draw down the budget surplus
without ever putting one cent, and at the very most pennies a
week, into the pocket of the average consumer. To put it
simply, it's a bad idea.
For all the above reasons and more, we ask you to oppose
any effort to repeal or suspend any portion of the gas tax if
the full Senate considers it.
Sincerely yours,
Terence M. O'Sullivan,
General President.
____
American Portland
Cement Alliance,
Washington, DC, April 6, 2000.
Hon. John Warner,
U.S. Senate,
Washington, DC.
Dear Senator Warner: On behalf of the American Portland
Cement Alliance (APCA), a trade association representing
virtually all domestic portland cement manufacturers, thank
you for voting in favor of the Byrd-Warner-Baucus-Voinovich-
Lautenberg-Bond sense of the Senate amendment to the budget
resolution.
As you know, an attempt to repeal or temporarily suspend
the federal fuels user fees (gasoline tax) may occur next
week, possibly during consideration of the Marriage Penalty
Tax legislation. Because the amendment would likely reimburse
the transportation trust funds with General Fund revenues,
its enactment could easily consume this year's entire
projected budgetary surplus (not required to protect the
Social Security Trust Fund). In short, if you have other
priorities, such as paying down the national debt, estate and
marriage penalty tax reductions, Medicare, or education, the
money will be gone.
APCA is deeply concerned that any reduction in the user fee
would undermine TEA-21 and the funding commitment that
legislation made to the states for highway and mass transit
programs. Any reduction in these user fees would jeopardize
the funding guarantee under TEA-21 and, more importantly,
introduce uncertainty for state highway and transit
improvement programs, and the construction and material
supply industries, such as the cement manufacturers.
Therefore, I respectfully ask that you vote against any
measures to repeal the federal fuels user fees.
Again, thank you for your support on the Byrd-Warner-
Baucus-Voinovich-Lautenberg-Bond sense of the Senate
amendment.
Sincerely,
Richard C. Creighton,
President.
____
AAA Washington Office,
Washington, DC, April 7, 2000.
Hon. Daniel K. Akaka,
U.S. Senate,
Washington, DC.
Dear Senator Akaka: AAA thanks you for your vote in support
of the amendment offered by Senator Robert Byrd (D-WV) to the
fiscal year 2001 budget resolution. The 66-34 vote in favor
of the Byrd amendment is a clear signal that the majority of
the U.S. Senate does not support efforts to suspend or repeal
any portion of the federal excise tax on gasoline.
AAA continues to have serious concerns about efforts to
reduce the federal gas tax. Motorists will see very little
benefit from the repeal and they could, in fact, face
significant safety problems. The loss of revenue to the
Highway Trust Fund would be disastrous to the important work
that needs to be done to improve the nation's highways,
bridges, and safety programs. A gas tax repeal is a short-
term fix to a long-term problem and is not in the best
interests of highway safety.
AAA encourages you to stand firm in opposition to further
consideration of any effort to repeal or suspend the federal
gas tax.
Sincerely,
Susan G. Pikrallidas,
Public and Government Relations.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. MURKOWSKI. How much time remains?
The PRESIDING OFFICER. The Senator has 40 seconds.
Mr. MURKOWSKI. I respond by telling my friend, Senator Warner, that
the gas station is the most competitive business in this country. I
yield the remaining time to my friend, Senator Smith of New Hampshire.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. SMITH of New Hampshire. How much time remains?
The PRESIDING OFFICER. The Senator has 30 seconds.
Mr. SMITH of New Hampshire. Mr. President, under S. 2285, lost
revenues to the highway trust fund would be made up dollar for dollar
from the on-budget surplus. Let's not forget that we are in this
position because the President of the United States does not have an
energy policy. We cannot continue to risk both the well-being of the
American people and our national security. This policy of relying on
overseas energy has left us vulnerable to the whims of foreign
countries.
Passage of S. 2285 will bring relief to working families and protect
our highway trust fund. I urge my colleagues to support the
legislation.
The PRESIDING OFFICER. The minority leader.
Mr. DASCHLE. Mr. President, I will use a few minutes of my leader
time, if I may, because I understand we have no time on our side
either.
I ask unanimous consent that a letter sent to me by two Cabinet
officials, Larry Summers and Bill Richardson, be printed in the Record
at this point.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
April 10, 2000.
Hon. Thomas Daschle,
Minority Leader,
U.S. Senate; Washington, DC. 20910
Dear Senator Daschle: The Administration believes that
Congress should pass critical tax credits and incentives that
would promote energy efficiency and the use of renewably
energy resources to enhance our energy security, instead of a
temporary suspension of fuel taxes that will offer consumers
little tangible benefit while risking highway and mass
transit funds and squeezing other key priorities like
education and law enforcement.
We urge the Congress to adopt measures that would address
fundamental energy needs. The President has proposed a
comprehensive tax package, including new tax credits for
domestic oil producers and essential incentives to promote
energy efficiency and the use of renewable energy sources.
Congress should pass the President's tax package and fund
fully his fiscal year 2001 budget and 2000 Supplemental to
promote energy security through the use of domestic energy
technologies. Enactment of these proposals would reduce the
effect of high energy prices, decrease our dependence on
imported oil, and improve the environment.
Much of the benefit of the proposal would accrue to OPEC
and other producers rather than American consumers, in
contrast to the Administration's approach, which seeks to
enhance energy security by increasing domestic energy
supplies and energy efficiency. Reducing fuel taxes would
increase the demand for imported oil. The quantity of oil in
the world market in effectively fixed in the short term. The
combination of increased demand and a fixed supply would
increase the price of oil, with much of that increase
accruing to OPEC instead of American consumers.
The Transportation Equity Act for the 21st century, PL.
105-178, signed by the President on June 9, 1998, guarantees
that funds deposited in the highway account will be
automatically spent on federal highway and construction
needs. The transportation fuels taxes are in the nature of
user fees to recoup those costs. We believe that this
legislation is inconsistent with this national policy that
users of the nation's transportation system should pay for
the costs of building and maintaining our transportation
infrastructure. There is no justification for shifting
transportation infrastructure costs, as S. 2285 would do,
from the users of this transportation system to taxpayers
generally.
We are concerned that S. 2385 only partially protects the
Social Security Trust Fund. It provides that the revenue loss
from rate reductions in excess of 4.3 cents per gallon may
not exceed the on-budget surplus. The 4.3-cents-per-gallon
rate reduction, however, would apply even if it remits in an
on-budget deficit. In any case in which the rate reduction
results in a deficit, the ultimate effect is that a portion
of the Social Security Trust Fund equal to the deficit is
diverted to maintain highway spending programs at their
current level. In addition, S. 2285 would affect receipts and
is subject to the pay-as-you-go requirement of the Omnibus
Budget Reconciliation Act of 1990.
Finally, we are concerned that this proposal cannot be
administered. S. 2285 provides that the aggregate revenue
effect of rate reduction in excess of 4.3 cents per gallon
not exceed the on-budget surplus during the period the taxes
are reduced. We are concerned about our ability to administer
this limitation if the rate reductions in excess of 4.3 cents
per gallon are triggered. Because the rate reduction period
does not coincide with normal budgetary accounting periods,
the budget surplus for the period may never be known.
[[Page S2506]]
For the forgoing reasons, we strongly oppose S. 2285. We
look forward to working with you on meaningful legislation
that will promote domestic energy solutions and reduce our
long-term dependency on foreign oil.
Sincerely,
Lawrence H. Summers.
Bill Richardson.
Mr. DASCHLE. Basically, the letter says what a number of our
colleagues have been saying throughout this debate, that this could
have devastating consequences on general revenues as well as on the
Social Security trust fund per se.
It says, briefly reading a couple of paragraphs:
In any case in which the rate reduction results in a
deficit, the ultimate effect is that a portion of the Social
Security Trust Fund equal to that deficit is diverted to
maintain highway spending programs at the current level. In
addition, S. 2285 would affect receipts and is subject to the
pay-as-you-go requirements of the Omnibus Budget
Reconciliation Act of 1990.
We are concerned that this proposal cannot be administered.
S. 2285 provides that the aggregate revenue effect of rate
reductions in excess of 4.3 cents per gallon not exceed the
on-budget surplus during the period the taxes are reduced. We
are concerned about our ability to administer this limitation
if the rate reductions in excess of 4.3 cents per gallon are
triggered. Because the rate reduction period does not
coincide with normal budgetary accounting periods, the budget
surplus for the period may never be known.
We ought to have a very good and thorough discussion about the
implications of this bill prior to the time we are called upon to vote
on it. By voting for cloture now, we cut off debate that never was. We
cut off a debate that ought to provide a thorough examination of the
implications on the Social Security trust fund, of the budget overall,
of highway construction this year, of the implications for
infrastructure in the outyears, of the solvency of the trust fund in
periods beyond this fiscal year. All of those issues have not been
debated.
For that reason, I hope my colleagues will join me in opposition to
the cloture vote to be cast today.
I yield the floor.
Cloture Motion
The PRESIDING OFFICER. All time has expired. Under the previous
order, the Chair lays before the Senate the pending cloture motion,
which the clerk will state.
The assistant legislative clerk read as follows:
Cloture Motion
We the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on Calendar No.
473, S. 2285, a bill instituting a Federal fuels tax holiday:
Trent Lott, Judd Gregg, Connie Mack, Kay Bailey
Hutchison, James Inhofe, Frank H. Murkowski, Paul
Coverdell, Michael Crapo, Thad Cochran, Charles
Grassley, Jim Bunning, Gordon Smith, Ben Nighthorse
Campbell, Larry E. Craig, Bob Smith, and Don Nickles.
The PRESIDING OFFICER. By unanimous consent, the quorum call has been
waived.
The question is, Is it the sense of the Senate that debate on S.
2285, a bill instituting a Federal fuels tax holiday, shall be brought
to a close?
The yeas and nays are required under the rule. The clerk will call
the roll.
The bill clerk called the roll.
Mr. REID. I announce that the Senator from West Virginia (Mr.
Rockefeller) is necessarily absent.
The PRESIDING OFFICER (Mr. Crapo). Are there any other Senators in
the Chamber desiring to vote?
The yeas and nays resulted--yeas 43, nays 56, as follows:
[Rollcall Vote No. 80 Leg.]
YEAS--43
Abraham
Allard
Brownback
Bunning
Burns
Campbell
Cochran
Collins
Coverdell
Craig
Crapo
DeWine
Domenici
Fitzgerald
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Helms
Hutchison
Inhofe
Kyl
Lott
Lugar
Mack
McCain
McConnell
Murkowski
Nickles
Roth
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thompson
Thurmond
NAYS--56
Akaka
Ashcroft
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Bryan
Byrd
Chafee, L.
Cleland
Conrad
Daschle
Dodd
Dorgan
Durbin
Edwards
Enzi
Feingold
Feinstein
Frist
Graham
Harkin
Hollings
Hutchinson
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Mikulski
Moynihan
Murray
Reed
Reid
Robb
Roberts
Sarbanes
Schumer
Thomas
Torricelli
Voinovich
Warner
Wellstone
Wyden
NOT VOTING--1
Rockefeller
The PRESIDING OFFICER. On this vote, the yeas are 43, the nays are
56. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected.
Mr. WARNER. Mr. President, I move to reconsider the vote.
Mr. BYRD. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The majority leader.
____________________