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Debate over federal gas tax holiday mirrors Texas fight

06:47 PM CDT on Friday, May 2, 2008

By ELISE HU
KVUE News

Video
Debate over federal gas tax holiday mirrors Texas fight
05/02/2008
Local/State Videos
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Presidential candidates continue their policy battle over a proposed federal gas tax holiday for the summer.

But the debate isn't new. Texas lawmakers took on the issue during the waning weeks of the 2007 legislative session.

As gas prices creep higher, consumers feel pain at the pump.

"People can't even drive to work anymore, and I think the government ought to do something about it," said Austin driver Kristin Norton.

Democratic presidential candidate Hillary Clinton and Republican nominee John McCain agree that a three month break from the 18 cent a gallon federal gas tax could help.

"It's a nice little break for Americans," said Senator John McCain, R-Arizona.

But Democrat Barack Obama calls the call for a tax holiday political pandering.

"Here's the problem. Not only is it worth 30 cents a day to you, but it takes money out of the federal highway fund," Obama said to a crowd in Indiana.

He's begun airing ads this week targeting McCain and Clinton for their support of the break. If the debate sounds familiar, it's because it happened in the Texas Capitol in May of 2007.

House members passed an amendment that would suspend the state gas tax for three months. But the Senate didn't take up the measure, because of it would have cost about $700 million in money for roads and bridges.

"We've got to have more roads in this state, and we certainly can't build them if we're rebating back the very funds we're expected to build these roadways from," said State Senator John Carona, R-Dallas.

Economists say the national proposal presents the same problems -- but on a larger scale.

"I'm not sure it's going to put any money in people's pockets. It's probably going to put money in refiner's pockets, in oil companies' pockets," said Dick Lavine, fiscal policy analyst with the Center for Public Policy Priorities.

He says simple economics is getting mired in election year politics.

"Of course people want to pay less for gasoline," he said. "But cutting the gas tax has nothing to do with the price of gasoline, once supply and demand set the price again."