ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, May 7, 1996 TAG: 9605070112
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Senate Democrats conceded Monday that a temporary repeal of the 1993 gasoline tax increase is unavoidable, and Republican leaders prepared to tap the nation's savings institutions to pay for it.
Senate Majority Leader Bob Dole, R-Kan., said the Senate could vote as soon as today on the tax cut, which he proposed less than two weeks ago. He planned to discuss the timing, as well as a Democratic proposal to raise the minimum wage, with Senate Minority Leader Tom Daschle.
``We think [it] is inevitable,'' Daschle, D-S.D., told reporters. Republicans are ``in the majority. They have the votes to pass legislation.''
The leading proposal for paying for the cut, according to House and Senate aides, was separate legislation that strengthens the government fund insuring savings and loan deposits.
That plan requires a one-time premium payment from S&Ls, and, under budget rules, the money can be used to offset the tax cut. GOP leaders also are looking at a cut in Energy Secretary Hazel O'Leary's travel budget.
The Clinton administration supports the S&L legislation, and Daschle said ``I'm not necessarily averse'' to using it to cut the gas tax.
Republican leaders are pushing hard for the repeal, which is seen as having wide popular appeal. Dole, Clinton's rival in the presidential race, notes repeatedly that the tax increase was approved ``without a single Republican vote.''
Many Democrats are criticizing the tax cut, saying it could amount to a windfall for the oil companies who pay the tax and ultimately pass it on to the consumer. And environmentalists maintain that the tax cut would encourage more energy consumption and hurt the environment.
Repeal is ``attractive as a matter of raw politics, but it is terrible as a matter of public policy,'' said Sen. Charles Robb, D-Va. ``Just as we were beginning to make sustained progress in bringing down the deficit ... we blink. We can't take the political heat.''
However, some Democrats feel compelled to vote for the tax cut, and Republicans are near unanimous in backing it.
At the White House, spokesman Mike McCurry said Clinton wanted the tax cut considered as part of a balanced budget. But that doesn't mean Clinton had decided to veto the tax cut.
``If it comes to us separately, we'll look at it separately,'' McCurry said. ``We would hope that the Congress would give equal priority treatment to raising the minimum wage.''
With gas prices soaring roughly 20 cents per gallon since February, Dole on April 26 proposed shaving the 1993 increase of 4.3 cents off the 18.3-cent federal gasoline tax.
Dole suggested the Senate should act today, which marks what the private, business-financed Tax Foundation has called Tax Freedom Day. That's the date, according to its calculation, by which the average taxpayer has earned enough to pay federal, state and local taxes for the year.
It ``would be good day to pass the gas-tax repeal. It seems to me it might have a nice ring to it,'' Dole said.
The cut would begin in mid-May or the start of June and end Dec. 31. They hope to make it permanent as part of the 1997 budget.
Meanwhile, the chairman of Exxon Corp. said Monday in Detroit that motorists may or may not see a difference in prices at the pump if Congress rolls back the tax by 4.3 cents per gallon.
``The marketplace will decide what happens,'' Exxon Chairman Lee Raymond said in Detroit.
``My guess is, the price of gas will be 4.3 cents less than it would have been without the rollback. But who knows now what it would have been?'' he said.
He also said the government's release of 12 million barrels of oil from the nation's strategic reserves will hardly be felt. America uses about 17 million barrels a day, Raymond said.
More significant, he said, is the willingness of the government to ``interfere with the open energy market.''
``We had government intervention in the market in the 1970s and during the Gulf War, and the only result was lines at the pump,'' Raymond said.
``The real price of gasoline is lower today than it has been in 77 years,'' Raymond said. ``The only thing that has continued to move upward is the level of taxes.''
Knight-Ridder/Tribune contributed to this story.
LENGTH: Medium: 83 linesby CNB