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Gas tax debate: The odd alliance

The New York Times notes the odd alliance on this issue between McCain and Clinton, who are both hammering Obama for his opposition on the gas tax holiday.

Since a gas tax holiday doesn't look feasible, congressional Dems are pushing an alternative that could give some money back to consumers. "The proposals are expected to include temporarily halting the build-up of the nation's emergency oil stockpile, giving regulators greater authority to investigate and penalize oil companies that engage in price gouging, and seeking to discourage speculative trading in oil and gas markets, possibly by raising the collateral traders must provide."

"Democrats are likely to propose a temporary 'windfall-profits tax,' possibly of 25%, on major oil companies. Companies would be exempt from the tax if they invested profits in domestically produced renewable fuels or expanded refinery capacity or renewable electricity production. Democrats were discussing Thursday how the additional tax revenues might be used, with some advocating rebates for consumers and others backing additional investment in research and incentives for renewable energy."

Obama could use this proposal, like, yesterday.

The Wall Street Journal looks at Obama's attempt to sell the idea that this gas tax holiday is bad policy. "Obama has been positioning himself as a candidate who can win by telling voters hard truths rather than offering easy political solutions. 'I'm here to tell you the truth,' Sen. Obama says in a new 60-second ad running in North Carolina and Indiana ahead of Tuesday's primaries. 'You're going to save about  $25, $30, or half a tank of gas.' A range of economists, including Gregory Mankiw, who was chairman of President Bush's Council of Economic Advisers, and Leonard Burman, who directs the Urban-Brookings Tax Policy Center, have criticized the proposal because it would save drivers little while encouraging gasoline consumption and depleting the federal Highway Trust Fund. Sen. Obama opposes the holiday for the same reasons."

"But the political popularity of gas-price relief illustrates the uphill climb facing Sen. Obama. After making his plea Thursday at a retirement community in Columbia City, Ind., an older voter asked him why he couldn't support a gas-tax holiday that would be funded by a tax on oil companies, as Sen. Clinton has proposed, because it would offer some short-term relief. 'A lot of us are short term,' she quipped."

A GOP operative on the Hill passes along these bullet points from the latest Pew survey that this person thinks is something that ought to make Dems nervous.
-- For the first time this year, the most closely followed news story was not the campaign—it was gas prices. When asked what interests them about the issue, most (53 percent) wanted to know why prices are rising/fluctuating.
-- A majority of respondents (51 percent) now says that there is "too much" media coverage of the presidential campaign. That's up sharply from 36 percent in late January. The campaign accounted for the plurality (44 percent) of news coverage.
-- Nearly half of respondents (44 percent) said there was "too little" coverage of Iraq over the past week.
-- The top stories that respondents said they followed the most were: gas prices (27 percent), 2008 campaign (25 percent), polygamy raid (12 percent), Iraq (nine percent), food shortages (six percent)
-- The most coverage was given to the 2008 campaign (44 percent); all the other "most closely" followed stories received less than five percent each of the coverage.