In Wake of Mitt Romney Call for Obama to Fire ‘Gas Hike Trio,’ Obama Campaign Dings Romney for Raising Gas Taxes

Mar 18, 2012 12:21pm

Responding to Republican Mitt Romney’s call that President Obama fire his “gas hike trio” – Energy Secretary Steven Chu, Environmental Protection Agency Administrator Lisa Jackson, and Interior Secretary Ken Salazar – the Obama campaign took a shot at Romney Sunday for having raised gas taxes on Massachusetts motorists.

“As a result of the president’s all-of-the-above energy strategy, domestic oil and gas production has increased each year and our dependence on foreign oil is at a 16-year low,” Obama campaign spokesman Ben LaBolt told ABC News, when asked for a response to Romney’s call for the president to fire three members of his cabinet. “In Massachusetts, Gov. Romney raised the gas tax by 400 percent. Now Mitt Romney rolled out a tax plan that continues to charge taxpayers $4 billion a year to subsidize oil and gas companies making record profits and he opposed raising fuel economy standards, which will save consumers an average of $8,000 per vehicle.”

Just this morning on “Fox News Sunday,” Romney told guest anchor Bret Baier that when Obama “ran for office he said he wanted to see gasoline prices go up. He said that energy prices would skyrocket under his views and he has selected three people to help him implement that program: the secretary of energy, the secretary of the interior and the EPA administrator. And this ‘gas hike trio’ has been doing the job over the last three and a half years and gas prices are up. The right course is they ought to be fired.”

Romney said that “the president has apparently suffered an election-year conversion” since he has “decided that gasoline prices should come down. Well, the ‘gas hike trio’ has been going in the other direction. Time for them to go, probably hand in their resignations, if he’s really serious about that, and start drilling for energy here.”

 

 

LaBolt then got even feistier on this issue on Twitter, writing:  “When Romney talks about the gas hike trio is he talking about his advisor who wanted to raise the gas tax to over $2? http://nyti.ms/FPP2Aw

His tweet provided a link to a January 2012 column on tax reform by Greg Mankiw, once the chairman of the Council of Economic Advisers for President George W. Bush and since 2006 a Romney adviser. Mankiw, a Harvard economics professor, wrote:

“Consider the tax on gasoline. Driving your car is associated with various adverse side effects, which economists call externalities. These include traffic congestion, accidents, local pollution and global climate change. If the tax on gasoline were higher, people would alter their behavior to drive less. They would be more likely to take public transportation, use car pools or live closer to work. The incentives they face when deciding how much to drive would more closely match the true social costs and benefits.

 ”Economists who have added up all the externalities associated with driving conclude that a tax exceeding $2 a gallon makes sense. That would provide substantial revenue that could be used to reduce other taxes. By taxing bad things more, we could tax good things less.”

LaBolt also asked: “Or does @MittRomney want to fire himself for raising the gas tax by 400% in MA?”

President Obama and his team seem to be feeling quite vulnerable on the issue of gas prices, fearing that the skyrocketing prices could undermine the fragile economic recovery as well as consumer confidence – and thus the president’s poll numbers. The president has held three energy-related events in as many weeks. LaBolt’s assertion that domestic production is up and dependence is down “as a result” of President Obama’s energy policies is disputed by energy experts, who say the reasons are far more complicated, including steps taken by previous administrations and the recession.

But GOP frontrunner Romney and his team must also know that the governor is vulnerable on the issue of gas taxes, given that in 2008, the campaign of Sen. John McCain, R-Ariz., attacked Romney for the gas fee, which Romney raised from half a cent per gallon to 2.5 cents per gallon, as the governor in 2003 sought ways to pay down the deficit.

McCain campaign communications director Jill Hazelbaker responded to a Romney attack on McCain over energy issues by saying, “Mitt Romney has proven in this campaign that he will say anything to anyone at any time if he thinks it will help him politically. … As governor, Mitt Romney effectively raised gas taxes on every single motorist in Massachusetts.”

The McCain campaign noted that in a 2007 Boston Globe story by Brian Mooney, the fee hike was described as “clearly excessive,” because the increase would generate $60 million per year for a de-contamination program but produced vast surpluses amounting to tens of millions of dollars. McCain has this year endorsed Romney.

Then and in 2003, when the fee was raised, Romney and his team disputed that the fee increase was a tax increase.

That defense was greeted with some skepticism. In an April 11, 2003 Boston Herald story called “Pump it up! Goosing the gas tax with Mitt,” Cosmo Macero, Jr., described the fee hike this way:

“Gov. Romney’s administration is whacking motorists with the equivalent of a 2-cent-a-gallon gas tax hike, thanks to a little-known fund that pays for cleaning spills and underground leaks at local filling stations. Gas wholesalers pay a fee into the fund for every 10,000 gallons they deliver to retail filling stations in Massachusetts. As of April 1, on the Romney crew’s say-so, the fee went from $ 50 for every 10,000 gallons to … $ 250. That stunning fivefold increase looks particularly onerous when you break it down to the per-gallon cost: from a half-cent per gallon to 2 1/2 cents in one fell swoop. What it means: At least $30 million a year to the cleanup fund for every penny the fee is increased.

“‘It’s a nice little backdoor tax increase,’ is how one former state official explains it. That’s because wholesalers almost always pass the cost directly down to retailers, and they pass it to consumers. ‘Taxes or fees are usually a direct pass-through,’ says Stephen Dodge, who represents the Massachusetts chapter of the American Petroleum Council. ‘It would be disingenuous to say that’s not the case.’”

A spokesman and lobbyist for AAA Southern New England later told Macero that the fee was “a backdoor tax.”

-Jake Tapper

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