ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, May 22, 1996 TAG: 9605220050
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
NOTE: Lede
With gasoline prices already stabilizing, the House voted Tuesday to suspend temporarily a 4.3-cent-per-gallon tax increase imposed by Democrats in 1993.
The 301-108 vote came as Energy Department forecasters predicted a fall in retail gasoline prices of as much as 6 cents a gallon by Independence Day even with no action on federal tax levels. Wholesale gasoline and crude oil prices already have fallen.
All Virginia Republicans voted for the measure except Rep. Frank Wolf of Fairfax County. All Virginia Democrats voted against the measure except Rep. Rick Boucher of Abingdon and Rep. Norman Sisisky of Petersburg.
Republicans sought maximum political advantage, reminding voters again and again that President Clinton and Congress raised the tax without a single GOP vote.
``Show the American people Congress knows where the money comes from,'' Ways and Means Chairman Bill Archer, R-Texas, urged colleagues. ``Give back the gas tax and admit we never should have taken it in the first place.''
The measure would return the tax to its pre-1993 level of 14 cents a gallon through the end of the year. After that, without subsequent action, the tax would return to 18.3 cents.
Rep. Sam Gibbons of Florida, the senior Democrat on the Ways and Means Committee, denounced the bill as ``pandering at its worst.'' But many other Democrats went along, even though Republicans rejected, 225-183, a Democratic move aimed at preventing oil companies from pocketing the canceled tax before it reaches consumers.
``At the end of the day ..., I still hope the companies will do the right thing,'' said Minority Leader Dick Gephardt, D-Mo. ``People are hard-pressed in this country. ... They're looking for a little relief.''
A motorist driving 12,000 miles a year, and getting 20 miles per gallon, should benefit by about $15 between now and the end of the year with the full tax cut.
Democrats have blocked the measure in the Senate, and Majority Whip Trent Lott, R-Miss., said he does not expect a vote before Memorial Day. But Senate Minority Leader Tom Daschle, D-S.D., saw ``signs of movement ... that leave us more optimistic'' if the House votes today, as expected, to increase the minimum wage.
House Republicans grudgingly cleared the way Tuesday night for legislation to raise the minimum wage by 90 cents an hour over two years.
After weeks of trying to prevent the vote, House Republicans on Tuesday night settled on a proposal providing a 50-cent-an-hour hike in the federal wage floor effective July 1, with a second, 40-cent increase to take effect a year later. The current minimum wage is $4.25 an hour.
House Speaker Newt Gingrich predicted the measure would pass today, along with a companion bill the GOP crafted to provide small business with tax breaks designed to offset any economic damage caused by the higher minimum wage.
The final decisions were made on the bills after negotiations with the White House aimed at yielding legislation acceptable to President Clinton. Clinton and congressional Democrats have been demanding a measure that is stripped of ``poison pill'' provisions opposed by organized labor.
Clinton has indicated he would sign both measures if they reach his desk at around the same time. ``They ought to go hand in hand,'' White House spokesman Mike McCurry said Tuesday.
Some Democrats argued, however, that reducing the gas tax would increase the budget deficit and hurt energy conservation.
``It makes no sense to me whatsoever ... to go out of our way to eliminate one of the things that has provided a success story over the last three years in cutting the deficit in half,'' said Rep. David Skaggs, D-Colo.
Although Republicans unanimously opposed the gas-tax increase when it was enacted, they made no move to repeal it until April 26, when Senate Majority Leader Bob Dole, the presumed GOP presidential nominee, proposed a temporary rollback. He sought to capitalize on motorists' anger over a 20-cent-a-gallon increase in gasoline prices since early February.
``We see this as our effort to support President Dole in his first salvo on taxes,'' said House Majority Leader Dick Armey, R-Texas.
Even before the House vote, indications had appeared of an imminent price decline. According to Computer Petroleum Corp. of St. Paul, Minn., prices averaged $1.30 per gallon nationally last week and were little changed from the previous two weeks.
With Monday's agreement at the United Nations for Iraq to sell $1 billion worth of oil every 90 days for food and medicine, the price of a gallon of gasoline should drop 2 cents to 6 cents by July 4, according to the federal Energy Information Administration, a division of the Energy Department.
Democrats had sought to ensure that consumers get the tax reduction by penalizing oil companies failing to pass it on. They provided for no enforcement mechanism but said a GOP provision, requiring the General Accounting Office to study the impact of the tax cut, wasn't good enough.
Republicans cited statements from Chevron, Texaco and Arco promising not to keep the tax cut, which they said would be impossible anyway because of market forces.
House Speaker Newt Gingrich, R-Ga., told reporters the gas tax ``sets the stage for us to roll back other Clinton taxes.'' But no plans are on the horizon to repeal Clinton's income tax increases on taxpayers earning more than $250,000 and on better-off Social Security recipients.
The cost of the temporary rollback was about $2.9 billion, which the legislation would offset by cutting the administrative and travel budget of the Energy Department and auctioning bands of the broadcast spectrum.
In addition to gasoline, the tax cut also applies to fuel for intercity buses, recreational boats and air and rail travel.
GOP lawmakers said they would work for permanent repeal of the tax increase, but the budget resolution adopted by the House last week offers no way of paying the $34 billion cost of repeal through 2002.
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