The Obama White House opposes a move in the Senate, led by South Carolina Republican Lindsey Graham, to raise federal gasoline taxes within still-developing legislation to reduce green house gas emissions and boost alternative energy supplies, senior administration sources told Fox.I can't wait until Graham has to run for office again. I look forward to contributing to anybody who runs against him.
Officially, the stated White House policy, articulated by spokesman Ben LaBolt, is the administration would "review" Graham's proposed 15-cent-per-gallon gasoline tax increase.
But sources told Fox the White House will oppose Graham's gasoline tax gambit because senior advisers believe it has three flaws: it will shield the oil and gas industry from paying to lower green house gas emissions; it will force higher prices on consumers still struggling during the recession; and it will not change driving behavior enough to significantly reduce tail-pipe emissions.
The federal gasoline tax is currently 18.4 cents per gallon.
The Graham plan remain a bit opaque and is the subject of intense talks within GOP ranks. Graham is trying to build Republican support for a climate change and alternative energy bill. To do that, Graham is looking for what his spokesman Kevin Bishop called "sector specific" revenue sources as an alternative to across-the-board taxes on carbon-based pollution under a so-called cap-and-trade system.
"This is still a work in progress," Bishop said of Graham's gasoline tax. "We are in negotiations and nothing has been agreed to."
The concept, Bishop said, is to use a higher gasoline tax to help vehicle tailpipe emissions, which he said account for one-third of all green-house gases. The White House, administration sources tell Fox, already believes it's accomplished that with new, stricter fuel efficiency and tailpipe emissions standards.
While most on Capitol Hill regard Graham's proposal a gasoline tax, that not how it's being legislatively marketed. Graham instead calls his idea a "linked fee."
Why?
Because the tax links the price of the higher gasoline tax to the average cost of emission permits the federal government would give to electric utilities and power plants. The emission permits would allow companies to buy the right to pollute or trade the credits they earn for reducing pollution to other plants or utilities that release more green house gases.
Under Graham's plan, the 15-cent per gallon gasoline tax woud rise alongside the price of the permits purchased by factories and utilities. Similarly, the gasoline tax would fall as the price of those permits decline. It's a complicated formula that Bishop concedes has yet to be fully drafted and yet to win any signifcant Republican support.
Graham's idea has drawn initially favorable reaction from numerous integrated oil and gas companies and may, Bishop said, attract the support of the U.S. Chamber of Commerce. Oil and gas companies that long-opposed higher gasoline taxes have warmed to one this time as an alternative to what they fear could be higher carbon taxes tied to their refinery operations.