April 29, 2004 Letter to President Bush, Senators Warner and Allen and Representative Moran
PO Box 8208
Alexandria, VA 22306-8208
April 29, 2004
The President
The White House
Washington, DC 20500
The Honorable John William Warner
United States Senate
225 Russell Senate Office Building
Washington, DC 20510-4601
The Honorable George F. Allen
United States Senate
204 Russell Senate Office Building
Washington, DC 20510-4604
The Honorable James P. Moran
U.S House of Representatives
2239 Rayburn House Office Building
Washington, DC 20515-4608
Dear Mr. President, Senators Warner and Allen and Representative Moran:
As the price of fuel continues to increase to record levels, I ask for your support of a moratorium on the collection of federal excise taxes on all transportation fuels, from the months of May through September. The gasoline tax of 18.4 cents, the diesel tax of 24.4 cents, and the jet fuel tax of 4.4 cents must all be suspended during the summer months to keep the economy moving. Given the current global climate, these taxes, if continued, are destined to cause irreparable harm to the U.S. economy.
Low U.S. commercial stocks of crude combined with taxing environmental regulations and high crude oil prices are strangling the supply of fuel. What’s more, the price of regular unleaded gasoline is set to increase to an all time premium. Nowhere more evident are price increases than at the gas pump and these will in turn lead to less consumer discretionary spending and less summer driving. Summer vacation travel will also be stifled by the already rising jet fuel costs, and the continuation of taxes on diesel will increase the cost of railroad and trucking transportation for goods. Therefore, costs of consumer products will be driven up in grocery and hardware stores across the country.
OPEC’s decision to reduce its crude oil production quota along with an uncertain supply of crude from Venezuela offers the U.S. market little hope ahead. China and Japan are both competing with the U.S. market for crude oil. Our stocks are continually depleting and China is driving the oil prices higher. Patrice Hill of the Washington Times reported on March 18, 2004 that “the country is behind schedule in its effort to build gasoline stocks before the summer driving season, when demand peaks.” Furthermore, environmental regulations banning MTBE as and additive in New York, California, and Connecticut require the addition of ethanol instead. This addition is perpetuating regional shortages of gasoline supply and is further driving up the costs of gas at the pump.
An increase in the price of a barrel of crude oil by $5 will cut the growth of the GDP by three tenths of a percentage point. The impact is accelerated as the price of crude increases. Moreover, the expected increase in the price of crude, from $38 to $42, will pack a much more damaging punch to the economy as compared our previous increase of $33 to $38, during the past year.
The American taxpayer is already paying too much in fuel taxes. With every apple bought, the burden of transportation costs is passed on to him. With every flight he takes, he is responsible for the tax passed off on him. And with every gallon of gas he pumps into his family car, he pays taxes. In gasoline alone, the American taxpayers are paying more than $50 billion annually representing an annual tax of $660 for the average American family. During these uncertain times the American taxpayer cannot support out economy while facing the burden of rising fuel prices.
Consumers have been faced with employment layoffs, cuts in benefits, and generous losses of personal long term investments. The fuel taxes must come to an end before summer vacation airline travel begins and before the summer gasoline price spike.
Please support a moratorium on the gas tax!
Sincerely,
James Landrith
June 1, 2004
Mr. James Landrith
PO Box 8208
Alexandria, Virginia 22306-8208
Dear Mr. Landrith:
Thank you for contacting me about the high price of gasoline and your interest in repealing the federal excise tax.
I appreciate your concerns. The price for regular gasoline has eclipsed past records and now hovers around $2.00 per gallon. While an all-time high in nominal terms, the current price of gasoline is still significantly lower than the inflation adjusted peak of $2.94 in 1981, and well below the prices seen regularly in European countries. This economic perspective may be helpful to place the price of gasoline in perspective, but it fails to reflect the large burden rising prices have on this country’s families and businesses.
Energy prices have been on the rise due to record low U.S. stockpiles and renewed economic growth that has spurred higher global fuel demand. Unfortunately, instability in the Middle East and a recent decision by the Organization of the Petroleum Exporting Countries (OPEC), which controls roughly half of the world’s exported crude, to limit production have boosted the price of crude oil to more than $40 per barrel.
The volatile gasoline landscape has not gone unnoticed by Congress. I have joined a number of my colleagues calling upon the Federal Trade Commission (FTC) to act on anti-competitive pricing policies and supporting efforts to bring OPEC’s price fixing policies under review by the World Trade Organization. I thought the enclosed tips to improve automobile performance and reduce costs, prepared by the Alliance to Save Energy, that might be of interest.
The rapid increase in the price of oil also continues to highlight our dependence on unstable foreign sources that now account for more than 50 percent of the oil we consume. To address this long-term concern, I have supported stockpiling additional oil reserves in the U.S. Strategic Petroleum Reserve and greater flexibility in the instances when it can be released to ensure sufficient supplies are available when foreign sources are disrupted. I have also supported increases in federal funding for federal energy research and development programs designed to promote greater energy efficiency and conservation. Had the first Bush administration in 1991 supported increasing the fuel efficiency in the average car from 27 mpg to 32 mpg, that action alone would have displaced all the oil we import from the Persian Gulf today. With close to 92 percent of our energy generated by fossil fuels, it is critically important for us to find ways to improve on its efficient use. Not only will these improvements reduce our dependency on foreign oil, but it will also help to improve the environment.
In recent years, some in Congress have advanced the idea of repealing or temporarily suspending the federal excise tax on gasoline when gas prices increase. The tax collected today is $0.184 per gallon and generates approximately $20 billion a year. This revenue is reinvested back into our transportation system to maintain existing infrastructure and expand capacity. While a suspension of the tax might provide some temporary relief, it would not keep prices from climbing again in the future. Moreover, it would starve existing transportation projects of their primary funding source and contribute to greater congestion and delays. Today, current congestion costs the local motorist more than $1,595 each year in lost time and wages, higher delivery costs for goods and services, and gasoline consumption from too many engines idling in traffic.
Please feel free to visit my updated website at http://www.house.gov/moran that contains information on topics that may be of interest. Thank you again for contacting me.
Yours truly,
James P. Moran
JPM/tba
Enclosure