Morning Action: Obama’s Gas Tax
EPA. Today, President Obama’s Environmental Protection Agency (EPA) will move ahead with a rule that will make gasoline even more expensive.
Oil industry officials, however, said the cost would be at least double the administration’s estimate and could add up to 9 cents a gallon in some places.
The proposed standards, which had been stuck in regulatory limbo since 2011, would reduce the amount of sulfur in U.S. gasoline by two-thirds and impose fleet-wide pollution limits on new vehicles by 2017.
Charles T. Drevna, president for the American Fuel and Petroleum Manufacturers, said the EPA is not obligated under the Clean Air Act to reduce the sulfur content of gas any further. U.S. refiners have lowered gasoline sulfur nearly 90 percent since 2004, according to the association, from 300 to 30 parts per million.
GUNS. As President Obama mounts another ineffective public relations effort on gun control, Senate Republicans are quietly drafting an alternative.
[Sen. Chuck] Grassley [R-IA] is concerned that the legislation being pushed by Democrats will violate the rights and liberties of U.S. citizens, particularly as it pertains to firearms.
Spokeswoman Beth Levine said: “Senator Grassley…is putting together an alternative bill that addresses gun violence in a manner that does not violate the constitutional rights of law-abiding citizens.”
While the details of Grassley’s legislation are still unknown, in the past he has focused on “straw purchasing and the illegal trafficking of firearms.” In fact, he was the Senator who stood shoulder-to-shoulder with Rep. Darrell Issa (R-CA) in investigating the straw purchases and gun trafficking that took place during the DOJ’s operation Fast and Furious in Obama’s first term.
SEQUESTER. What sequester? It could be that because Americans have not panicked over the onset of the sequester, the Obama administration is attempting to “maximize the pain.”
Major airlines, as well as the industry’s leading trade organization, Airlines for America, have drafted legal memos arguing that the FAA can and should exercise greater flexibility in implementing sequestration cuts.
The memos acknowledge that the sequester does impose some rigidity on how spending reductions happen, but also maintain that the FAA has sufficient flexibility to minimize disruptions to essential operations, which the White House budget office has encouraged all federal agencies to prioritize.
Congressional Republicans, as well as the airline industry, have asked the FAA to look elsewhere in its budget and to use its existing authority to transfer funds among programs to avoid cuts to air-traffic-control operations. Under sequestration, the FAA is required to cut $637 million, or roughly 5 percent, from its $12.5 billion budget.
VICTORY. As Congress weighs a massive overhaul of the tax code, conservatives scored a small, but significant victory during the Senate’s vote-a-rama last week.
The amendment endorsed a model called “dynamic scoring,” which assumes that tax cuts will pay for at least part of their cost by generating more economic activity. The measure by Sen. Rob Portman (R-Ohio) called on CBO and the Joint Committee on Taxation to include “macroeconomic feedback scoring” in all future estimates of tax legislation
The bottom line, according to Mike Franc of the conservative Heritage Foundation, is that CBO never gives credit to the idea that people and markets will change their behavior depending on the tax incentives they’re offered.
“You end up with the status quo becoming a tyranny of sorts,” Franc said. “Tax increases are not viewed as harmful. … People just go ahead and behave like they’ve always behaved, even if there’s another 8 to 12 percent coming out of their pockets. We feel like that’s kind of silly.”
STIMULUS. A White House press flack declared the administration still has “couple of tricks up our sleeve” when it comes to transportation pork projects. Today, President Obama is headed to Miami to pitch his latest plan.
President Barack Obama will press Congress to pass new tax incentives and other flexibility measures aimed at attracting more private sector investment in infrastructure projects around the country, a senior administration official said.
The president will flesh out the details of his proposals during a speech Friday at a Miami port that is undergoing $2 billion in upgrades, funded by public and private money. In his quick trip to South Florida, Obama will try to show the public that the economy remains his top priority in the midst of high-profile campaigns on immigration reform and gun control.
He also called in the national address for a “Fix-It-First” program that would spend $40 billion in taxpayer funds on urgent repairs.
Obama’s focus on generating more private sector investment underscores the tough road new spending faces on Capitol Hill, where Republican lawmakers often threaten to block additional spending unless it is offset through tax cuts or other measures.
The official said any increased spending associated with the proposals Obama was outlining Friday would not add to the deficit. But the official did not detail how the costs would be offset, saying only that more information would be included in the president’s budget.