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WASHINGTON – Every gallon of gas should cost $1 more, Sen. Richard Lugar, R-Ind., said, so Americans buy less and the country imports less foreign-produced oil.
In a column in today’s Washington Post, Lugar endorsed the proposal of a conservative columnist, who advocated the $1-a-gallon tax last month.
Charles Krauthammer said the $1 tax should be returned to people through lower payroll taxes or higher Social Security payments so their out-of-pocket expenses are the same.
“Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil – an amount equal to almost half of President Obama’s stimulus package,” Lugar wrote. “Those hundreds of billions should be spent to build a new energy economy here, not shipped to dangerous regimes overseas.”
Lugar said there’s recent evidence that higher pump prices make Americans use less gas.
“When gasoline prices topped $4 a gallon last year,” he said, “Americans chose to use less, leading to a major drop in gasoline consumption.”
That’s a good thing, Lugar has said repeatedly, because it makes the country less reliant on oil-producing countries that threaten U.S. national security. Three years ago he called dependence on foreign oil “the albatross of national security.”
“Nearly every major foreign policy challenge we face is aggravated by our continued addiction to oil,” he wrote in the Washington Post column, pointing to what can happen when energy is used as a weapon, such as Russia’s vise on Ukraine. Russia provides nearly all of Ukraine’s heating oil and has raised prices or restricted exports during two cold winters.
“A new president and changed economic conditions offer the chance to take a bold step toward freeing our nation from the grip of foreign petroleum,” Lugar wrote.
Lugar said governments have two ways of changing people’s behavior: make it illegal or tax it. A price increase through higher taxes, he said, is “almost always the most efficient, least invasive and most transparent remedy for market failure.”
He said increasing the cost of filling a gas tank would underscore the true cost of “our oil addiction” that includes not only the price of a barrel of oil but the “national security, economic vulnerability and environmental damage” of imported oil.
With higher gas prices, Lugar said, consumers would demand more fuel-efficient vehicles, choose non-petroleum alternatives to power them and find public-transit options that work.
“Pricing gasoline to reflect its true cost to the nation would help spur a vast market in which oil alternatives such as advanced biofuels would become competitive and innovation would flourish,” he said.
Lugar said Krauthammer’s suggestion for returning the $1-a-gallon tax to consumers is an important part of the idea. If reducing the payroll tax and increasing Social Security payments is too complicated, he said, “the government could regularly send a check to everyone over 18.”
Lugar is the first senator to endorse the $1-a-gallon tax and said he’s ready to work with the Obama administration to push it.
The White House has not commented directly on Lugar’s proposal. But in December, Obama said he opposes a gas tax that would be used for developing alternative energy.
“Putting additional burdens on American families right now, I think, is a mistake,” Obama said in a December “Meet the Press” interview. But he was not asked about the idea of increasing the price of gas with a per-gallon tax that would be refunded to consumers.
Lugar wrote that “no tax is perfect, and some special provisions may be necessary for individuals and groups disproportionately affected. But we as a nation are already suffering every day from our oil dependence, and decisive measures are needed.”
