U.S. Sen. Maggie Hassan’s push for a temporary federal gas tax holiday is being met with mockery from Democratic economists and dismay from green activists watching the New Hampshire Democrat abandon climate change policy.
Hassan announced last week she was joining Sen. Mark Kelly (D-Ariz.) to call for “temporarily suspending the federal gas tax through the end of the year, bringing much-needed economic relief to families across New Hampshire.”
“People are feeling a real pinch on everyday goods, and we must do more to help address rising costs, particularly the price of gas,” Hassan said in her press release. “We need to continue to think creatively about how we can find new ways to bring down costs.”
The Biden White House, which has yet to offer a plan to confront the current 40-year-high rate of inflation, is reportedly considering joining the effort — a sign, political analysts say, of the desperation among Democrats to find a political solution.
“The looming risks prompted Sens. Mark Kelly (D-Ariz.) and Maggie Hassan (D-N.H.), two lawmakers facing tough reelection fights, to unveil a bill last week that would suspend the tax until January. Their backers include Sens. Debbie Stabenow (D-Mich.), Catherine Cortez Masto (D-Nev.), Raphael G. Warnock (D-Ga.) and Jacky Rosen (D-Nev.), who similarly face tough midterm contests entering November, when Democrats’ majorities in the House and Senate are at risk.”
Hassan’s proposal is certainly not an economic solution, experts say.
Obama administration economic advisor Larry Summers dismissed Hassan’s proposal as “short-sighted, ineffective, goofy, and gimmicky.” Dropping the 18.4 cents per gallon tax merely moves the cost of gas back to what it was in the fall. And it does so by adding $20 billion to the already-astronomical $30 trillion federal debt.
And, as the Committee for a Responsible Federal Budget reports, “It will further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it. The result could be even higher rates of inflation in 2023.”
New Hampshire Democrats are pushing ahead, accusing Hassan’s GOP opponents of supporting higher taxes.
“Nothing gets the Republican Senate candidates scrambling like the chance for a check from Big Oil,” New Hampshire Democratic Party spokesperson Gates MacPherson said in a press release. “All three … came out in staunch opposition to lowering the cost of gas for Granite Staters by eliminating the federal gas tax for the rest of the year.”
But, critics quickly pointed out, since consumers, not oil companies, pay the gas tax, a holiday would drop prices and increase demand. If anything, it would mean more money for oil companies, not less.
Asked by NHJournal to explain how opposing lower prices for gasoline is pro-“Big Oil,” the NH Democratic Party declined to respond.
Hassan also declined to take any questions on her policy proposal from NHJournal, part of an attempted embargo of the news site by state Democrats. In particular, Hassan’s campaign was a “no comment” on news that the one-time opponent of fossil fuel expansion now supports more oil production.
Asked about the Biden administration’s efforts to address the inflation crisis, Hassan told CNN, “We need to push harder to see what we can do to resolve the supply chain issues. We need to push harder to increase the amount of oil, see if there’s more we could do to add to the supply side there. I’m going keep pushing them to do more.” [Emphasis added.]
Several Granite State environmental activists told NHJournal on background they are disturbed by Hassan’s about-face.
“She’s never been a leader on climate,” one Democratic activist said, “but this is the first time she’s worked against us.” Green activists point out that anything that encourages burning more gasoline works against the fight against climate change. “She’s the one doing Exxon Mobile a favor,” the activist said.
Larry Summers agrees. “It’s terrible policy at a moment we’ve labeled climate change as an existential threat,” he said.
And, Summers said, artificially lowering gasoline prices could actually send more money back into the rest of the economy, creating more inflation.
Another Democrat, Sen. Joe Manchin (D-W.V.), wasn’t any kinder to Hassan’s plan.
“Our trust funds are broke, and they want to break them more? It doesn’t make sense.”