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Mr. ABRAHAM. Mr. President, I appreciate the debate we have had today. The bottom line remains the same: People in America are paying too much
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Given the actions this Congress regularly takes on appropriations legislation, on budget legislation, on tax legislation, moving gigantic packages in short periods of time when we do our omnibus spending bills, the notion that this legislation somehow doesn't accomplish the mission of protecting the highway fund from diminution is, to me, an inaccurate statement.
The road projects will continue. The legislation ensures that the money will be there. We are aware that we have on-budget surpluses, not touching Social Security, adequate to meet the cost of suspending the gas tax. I believe those claims just simply are off the mark.
This will be a stake through the heart, if this is defeated, of the consumers of America who are paying way too much right now in gasoline prices. They deserve a break. Consumers in my State, for whom I come to the Senate floor and fight every day, deserve that break.
We are paying the highest gas prices in America. Whether consumers drive a minivan back and forth to children's activities, or drive a car to their job, regardless of their needs, in Michigan and across America, I find it hard to believe there is anyplace in America today where Members of this body are not hearing from constituents that the price of gasoline is too high.
We selected 5 months as the duration of this action for a simple reason. That is what we have been told by the spokesperson at the Department of Energy and in this administration is the approximate duration of time it will take for the various efforts they are engaged in to try to bring down the price of gasoline.
I am happy to modify this amendment to a shorter timeframe if we have assurances from anybody that would, in fact, be an adequate period of time for the supply issues to be addressed. That is not what we have heard. We heard it will take longer. We cannot wait longer in Michigan. We want relief now. The one thing we can do as a body is to suspend the Federal gas tax for 150 days.
I believe this is a clear-cut choice. We are here to try to help the men and women, the hard-working families of this country. This is something we can do in a concrete way to help them. It can be done in a fashion that does not undermine the road projects going on.
I believe this price, as a result of the suspension of the gas tax, will translate into prices at the pump. We saw it in our State the other day. As soon as the station brought down prices 18 cents, everybody went to that station for gas.
In any station, any oil company that does not bring down its prices in accordance with the passage of this legislation will lose business to the stations that do. That is the way of supply and demand. That is the way price will work. It will create the competitive market in which the people who abide by the terms of this legislation quickly benefit because they will be the ones with the customers.
It will help the farmers in my State who are right now screaming because of high gasoline prices. It will help the tourism industry in my State which is deeply concerned that the price of gasoline is so high. It will help the automotive industry which is worried that we will once again see a recession caused by a shift from American-made products to foreign imports.
For those reasons, I urge my colleagues to support this legislation. I assure them, look at it yourself; you will see the language is explicit. The highway trust fund moneys will not be diminished if we do this but consumers will gain the benefit with which we sought to protect them in the suspension of this gas tax.
Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. REID. Mr. President, for the closing debate on the minority side, I yield 2 minutes to the Senator from Montana.
Mr. BAUCUS. Mr. President, to summarize, obviously motorists do not like paying higher gasoline prices. As has been pointed out, it is a product, essentially, of supply and demand--in this case, short supply. That is what has happened.
I must also point out the price of gasoline is starting to come down significantly. According to figures as of July 10, the national average pr ice of gasoline has fallen 3 cents since last week, 8 cents since the recent high on July 12. That is not a lot, but it is better. In the Midwest, prices have fallen by 28 cents since their high on June 19, settling just below the national average, I might add. And for areas in the Midwest using reformulated gasoline, prices have fallen more than 34 cents since their high on June 19, settling just 4 cents above the national average. S o prices are already coming down.
No. 2, in real terms we are paying less, one-third less than we were in 1981. That is not an unimportant point. That is very important.
In addition, this is an off-again, on-again tax. This is a yo-yo tax. On again, off again, that is no way for the Congress to conduct fiscal policy. It just is not. Pretty soon, if we do this, we will have off-again, on-again taxes on everything under the Sun. What in the world is going on here? The American people want stability. They don't like the charades, the sleights of hand. Here is a tax that is going to go off just before an election, go right back on right after the election. Come on, give me a break. Is that what we want to do here?
I might add, this is expensive. The Senator says it is not going to come out of the highway trust fund. Let's put it this way: There is going to be at least $13 billion lost to revenue, and the Appropriations Committee has the authority to set the ceilings that are spent under the highway program. So it could lower those ceilings. It could come out of the highway trust fund, in effect. When we are out here trying to balance the budgets and figure out how to keep spending underneath the caps, there is a very good chance these dollars will come out of the highway trust fund and not go to the States. It is going to happen.
Finally, this is a program that has the trust of the American people. When they go to the pump and pay that 18.4 cents, they know it goes to the highway trust fund and they know the dollars come back to their States for highway construction, bridges, urban programs, and so forth.
Let's keep a little sanity around here and resoundingly reject this amendment.
Mr. ABRAHAM. Mr. President, I ask unanimous consent that a letter dated July 13, 2000, from Andrew Quinlan of CapitolWatch to Senator LOTT be printed in the RECORD.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
CAPITOLWATCH,
Washington, DC, July 13, 2000.
Hon. TRENT LOTT,
Majority Leader, U.S. Senate,
Washington, DC.
DEAR MAJORITY LEADER LOTT: On behalf of CapitolWatch and its 250,000 citizen lobbyists, I urge you to support an amendment sponsored by Senator Spencer Abraham (R-MI) to H.R. 8--the Death Tax Elimination Act. Sen. Abraham's amendment would suspend the 18.4 cents federal fuels tax for 150 days. With people in our nation's heartland paying over $2 a gallon coupled with a record budget surplus, the need has never been greater to suspend such a burdensome tax nor has the means to pay for it been more readily available.
Those who defend the federal gas tax do so on the basis that these taxes go to the Highway Trust Fund and presumably to the safety of our nation's highways. However, Abraham's amendment specifically addresses this concern by stating that it would replenish the Highway Trust Fund with some of the non-Social Security Surplus. The cost of this amendment would be $6.5 million, or only a little over 12 percent of the current budget surplus minus the Social Security and Medicare Trust Funds.
With record surpluses, a gas tax suspension would be an excellent way to immediately give part of that surplus back to overtaxed Americans. Sen. Abraham's amendment will accomplish two important goals of CapitolWatch. It would return a tax dividend back to hard-working Americans who created our historic economic growth and would keep Washington from spending the surplus on additional pork barrel projects instead of tax relief or debt reduction.
CapitolWatch's 250,000 supporters urge every member of the Senate to support Abraham's gas tax amendment and suspend the gas tax. If you would like more information, please contact CapitolWatch at (202) 544-2600 or visit our Web page at www.CapitolWatch.org.
Sincerely,
Andrew F. Quinlan,
Executive Director.
Mrs. FEINSTEIN. Mr. President, I am as upset by the gasoline price spikes as anyone else. I believe they are still very high in California, though prices have come down in my State from the highs they reached in March.
Having said that, I feel obliged to oppose this amendment despite understanding the sentiment behind it. The problem with the amendment is that there is no way to guarantee that a reduction in the federal gasoline tax will be passed on to consumers.
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. Earlier in the year, I called them. None could guarantee that a decrease in the gasoline tax would cause the same 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.
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, 14 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.
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.
As I said a moment ago, this amendment does not 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.
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 ge t the same fuel ef ficiency that passenger vehicles do. If SUVs and light duty trucks ha d the same fuel ef ficiency 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 ef ficiency requirements under the Corporate Av erage Fu el Ec onomy, C AFE, program. About two-thirds of all petroleum used goes to transportation, so boosting fuel ef ficiency 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 ef ficiency.
But CAFE standards ha ve not increased since the mid-1980s. And the situation is made worse by a loophole in the CAFE regulations. SUVs and light duty trucks--w hich 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-th irsty SUVs and light duty trucks, t his stranglehold on energy efficiency has produced an American fleet with the worst fuel ef ficiency since 1980. We are going backwards!
According to the non-partisan American Council for an Energy Efficient Economy, t he U.S. saves 3 million barrels of oil a day because of CAFE standards. C lose 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 at the pump because of the ``SUV loophole.'' Making SUVs and light duty trucks ge t 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 will not 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. < p> Mr. KOHL. Mr. President, I want to take a moment to discuss my opposition to this legislation repealing the federal gas tax of 18.4 cents.
The rising gas prices of this past spring and summer have been a great concern to many of us across the country, and nowhere has the burden been greater than in my State of Wisconsin where gas prices at some locations peaked over $2.00 per gallon. Families and businesses have been hard hit by this unexpected strain on their budgets. Everyday activities of work and recreation and summer travel plans have been altered. Fortunately, prices have begun to decline, and we are hopeful that that trend will only continue in the approaching months. This decline is in no small part the result of the bipartisan efforts of our Congressional delegation to provide relief to our constituents. With many forces at play, we worked strenuously to get to the root of the rising gas price problem.
First, we requested an EPA waiver from the reformulated gas requirements, which many considered to be a minor, yet still contributing, factor to the price increases. We also took the oil companies to task for gouging the consumer at the pump, while enjoying huge increases in profits. We called for a Federal Trade Commission investigation into the causes of spiking prices in Wisconsin and the Upper Midwest and now await the preliminary report. Lastly, we have attacked the main cause of the problem--the coordinated underproduction of oil on the part of OPEC, the organization of oil-producing nations. Fortunately, under pressure from Congress and the Administration, the OPEC nations have agreed to increase their oil output. All these efforts taken together have yielded positive results, with prices dropping by 30 to 40 cents, and certainly we will continue to be vigilant to ensure this trend continues.
Clearly I am very sympathetic to the amendment sponsor's stated goals of providing relief at the pump. But I am convinced that repealing the gas tax is the wrong way to achieve this important goal. Repealing the tax will drastically reduce the funds available for critically needed highway safety and maintenance programs, jeopardizing highway safety and putting other local services at risk by creating budget shortfalls. Moreover, repealing the tax does not guarantee that prices will go down for consumers. In fact, there is a strong likelihood that repealing the gas tax would only deliver more profits to the oil companies without delivering any relief to the consumer.
With the TEA-21 highway bill, we worked hard to guarantee that gas tax revenues would go to states for infrastructure improvements and to make the distribution of those monies fair for Wisconsin. We went from a 92 percent to 99 percent return on the dollar for Wisconsin, and those funds are desperately needed for road, bridge and transit improvements. It would be disastrous to lose transportation money just as Wisconsin, with our short construction season, is poised to start a number of road improvement and expansion projects.
Mr. BOND. Mr. President, I commend my good friend from Michigan on his attempt to address the issue of high gas prices. However, I must oppose his amendment.
The problem with the high gas prices we are experiencing is not the result of the gas taxes, but with the fact that the Clinton/Gore Administration has pursued a long-term consistent energy policy discouraging domestic production of oil, coal, nuclear, gas, hydropower, etc. The result of this cartel
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My colleagues offering this amendment have stated that this amendment would hold the trust fund harmless. Once again, I applaud their desire to help the consumers, but violating the ``trust'' in the highway trust fund is not holding the trust fund harmless.
We cannot risk the tremendous gains we made to ensure that the gas tax was a dedicated tax for a dedicated purpose. This is a true user fee. This is a user fee that works. I urge my colleagues to oppose the Abraham amendment.
The PRESIDING OFFICER. The time of the Senator has expired.
The Democrat whip.
Mr. REID. Mr. President, I raise the point of order that the pending amendment violates section 311(a)(2)(B) of the Congressional Budget Act of 1974.
The PRESIDING OFFICER. If the Senator will withhold, the Senator from Michigan still has time remaining.
Mr. REID. He yielded back his time previously.
Mr. ABRAHAM. I yielded the floor, but I will yield back the remainder of my time.
Mr. REID. I apologize.
Mr. ABRAHAM. May I respond, then, to his motion--or his point of order?
Mr. REID. It is not in order.
Mr. ABRAHAM. Mr. President, I move to waive section 311 of the Budget Act with respect to this amendment.
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