McCain Filling Up with Gas Money?
Did McCain’s Oil Industry Donations Affect His Gas Tax Hiatus Plan?
BY Caitlin Ginley AND Josh Israel | April 16, 2008
In a Tax Day speech Tuesday, Republican John McCain announced a series of economic stimulus proposals, most notably a summer-long suspension of the federal gasoline tax. With the national average cost of gas looming at more than $3.38 per gallon, the plan would impose a moratorium on collection of the 18.4-cent-tax between Memorial Day and Labor Day.
Reaction to this proposal has been mixed. Daniel Clifton, an investment analyst, told BusinessWeek that this shows the Republican presumptive nominee is “communicating with the average American.” Democratic rivals Barack Obama and Hillary Clinton disagree. The Clinton campaign dismissed the plan as “a George Bush redux of corporate windfalls,” and Obama spokesman Bill Burton dubbed it “one that could have been written by the corporate lobbyists who run his campaign, and probably was.”
An examination of campaign contributions by individuals from the oil and gas industry by the Center for Responsive Politics reveals that of the current candidates, McCain has been the largest recipient of their largesse. So far, they have given him more than $404,000 for his presidential campaign. This figure is significantly higher than their contributions to Clinton ($309,363) and Obama ($222,309). In fact, nearly 70 percent of the industry’s donations in the 2008 White House race have gone to McCain and other Republicans.
Critics suggest that not all of the tax reduction would make its way to consumers but would instead end up with the oil companies, allowing them to reap even larger profits. Analyst Lee Schipper, a visiting scholar at the University of California and emeritus associate at EMBARQ, the World Resources Institute’s Center for Sustainable Transport, told the Center that “a tax decrease will lead to slightly higher demand. Because the present world oil market is so tight, the resulting higher demand will push the pre-tax price of oil up all over the world, eating some or most of the tax rebate as seen by consumers.” He warned, “One nasty side effect is that the global price of oil will rise slightly with higher-than-otherwise U.S. demand.”
Dr. Bob Edgar, president and CEO of Common Cause, a nonprofit organization dedicated to eliminating the influence of money in politics, doesn’t think the contributions by oil executives and McCain’s proposal are coincidental. “It’s all connected,” he told the Center. “The energy companies have shown the largest profits of any of the corporations recently. And you then drill down a little deeper, you’ll find that they’re some of the largest donors to members of the House and Senate.”
A spokesman for the McCain campaign, however, assured the Center there is “no connection” between oil donations and the proposal.
Edgar cautioned, “If you’ve raised several hundred million dollars from energy companies or oil, coal, gas, any of the affiliate companies that deal with energy . . . or you connect that with the auto industry . . . you’re probably going to have a president that continues our current dependence on Middle Eastern oil and Venezuelan oil.”
And that dependence could be increased by such a gas tax cut.
The oil industry has historically worked to defeat gasoline tax increases, though a spokeswoman from the American Petroleum Institute told the Center, “On gas taxes like this, we leave it up to the government.” As such, she said, they have no position on McCain’s plan.