07-01-2000

POLITICS: Drilling for Blame

At this point, the eventual political fallout of soaring gasoline prices
is not all that clear. Not when one candidate is part of the incumbent
Administration. And the other candidate used to be an oilman.


Experts say there are lots of reasons for the oil shock. Reformulated
gasoline requirements imposed by the Environmental Protection Agency.
Price gouging by oil companies that saw their profits jump 500 percent
this year. And the core problem: the law of supply and demand, which
neither the Democratic Administration nor the Republican Congress has
figured out how to repeal. Factor in a booming economy, the summer driving
season, and the recently acquired suburban taste for vehicles that look
like armored personnel carriers, and you've got the formula for a demand
explosion.


Still, voters are suspicious-with good reason. Why did the gas price surge
happen so suddenly? And why has it been worse in one part of the country?
And why, when the political pressure got turned on, did gasoline prices at
some stations in Chicago drop as much as 12 cents a gallon last
week?


The political impact depends on whether voters blame government or
business. The answer is both. In a June Gallup poll, equal numbers blamed
the federal government (32 percent) and oil producers such as the
Organization of the Petroleum Exporting Countries (32 percent), followed
by the oil companies (23 percent). Very few blamed environmentalists who
demand cleaner fuel (3 percent) or drivers who insist on driving
gas-guzzlers (2 percent). Don't blame us, the people say. President Carter
tried that in 1979, and look what happened to him.


Gore is vulnerable on this issue because he's the government. No sooner
did the Vice President's "Prosperity and Progress" tour get
under way last month than the gas crisis hit him in the face. The crisis
did not just raise doubts about the durability of the country's economic
boom. It also turned out to be one of several blows to Gore, including the
replacement of Gore's campaign chairman and a leaked recommendation to
Attorney General Janet Reno that she appoint a special counsel to
investigate the Vice President's 1996 fund-raising activities.


The gas crisis is dangerous because it is hitting hardest in the
industrial Midwest, the key political battleground in 2000. Why are we
suffering, Illinois voters want to know. After all, the Speaker of the
House is from Illinois. Hillary Clinton is from Illinois. Gore's new
campaign chairman is named Daley.


The gas issue also reinforces an impression created by the Los Alamos
fiasco: Does this Administration know what it's doing? "There is no
plan in Washington to increase the supply of crude oil or natural
gas," George W. Bush has complained. "There is no national
energy plan."


Bush insists it's a problem of supply and demand. His answer? Increase the
oil supply. Domestically, he wants to increase funding for research and
exploration, including in protected wilderness areas in Alaska. Bush
thought he hit pay dirt last week when he brandished a copy of Gore's
book, Earth in the Balance, and noted that on page 173, the future Vice
President depicted "higher taxes on fossil fuels" as "one
of the logical first steps in changing our policies in a manner consistent
with a more responsible approach to the environment."


"This is a man who advocated raising gasoline taxes!" Bush
charged. "Now that the price of gas is high under their watch in this
current Administration, he seems to be running from his position."
The Gore gang maintains that the author was not recommending higher taxes
at the pump, but rather, special taxes on energy companies to fund an
environmental trust fund. Payroll tax cuts would discourage the companies
from passing the cost on to consumers.


Sure enough, polling shows that Bush voters tend to blame the government,
whereas Gore voters tend to blame oil producers. Gore and President
Clinton have called on the Federal Trade Commission to investigate
possible price collusion by the oil companies. Bush also endorsed a probe,
even though the Texas governor has lots of supporters in the oil
industry.


"Oil is my business," Bush said when he ran, unsuccessfully, for
Congress in 1978. Just look at campaign contributions from the oil and gas
industry: $1.5 million to Bush and less than $100,000 to Gore, according
to figures compiled by the Center for Responsive Politics through April
30. At least 25 of Bush's top fund-raisers, the "Pioneers," are
connected to the oil industry. That gives Gore a convenient target.
"I think that all of this adds up to a need for an investigation of
collusion, anti-trust violations and price gouging," Gore said last
week.


Do you believe gas price hikes are a conspiracy by big business to gouge
consumers? Then you're likely to vote for Gore, who wants government to go
after the oil industry. Think gas price hikes are a sign of government
incompetence? Then you're likely to vote for Bush, who touts his knowledge
of the energy industry.


But the polls show that people blame business and government equally. So
who gets hurt? Think of it this way: If people get mad at business, all
they can do is complain. If they get mad at government, they can vote.
That's something for Al Gore to think about.


William Schneider

National Journal