McCain Campaign Press Release - Barack Obama's "Gradual Adjustment" To Higher Gas Prices

ARLINGTON, VA -- Today, on the fourth day of Barack Obama's "Change That Works For You" tour, McCain spokesman Tucker Bounds issued the following statement:

"Barack Obama's assertion that the only problem with higher gas prices is that they've gone up too fast -- saying he'd prefer a 'gradual' increase instead -- shows how clearly out of touch he is with Americans struggling with record gas prices. At a time when Americans need relief at the pump, Barack Obama's support for higher gas prices and higher energy taxes is just another example of his weak economic judgment."

This Week In An Interview With CNBC, Barack Obama Said He Would Have Preferred If Higher Gasoline Prices Happened More Gradually:

In An Interview With CNBC, Barack Obama Said He Would Have Preferred A "Gradual" Increase In Gasoline Prices. BARACK OBAMA: "Well, I think that we have been slow to move in a better direction when it comes to energy usage. And the president, frankly, hasn't had an energy policy. And as a consequence, we've been consuming energy as if it's infinite. We now know that our demand is badly outstripping supply with China and India growing as rapidly as they are. So..." HARWOOD: "So could these high prices help us?" BARACK OBAMA: "I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money into their pockets, but also by encouraging the market to adapt to these new circumstances more quickly, particularly US automakers, then I think ultimately, we can come out o f this stronger and have a more efficient energy policy than we do right now." (CNBC, 6/10/08)

• Watch Barack Obama: http://www.youtube.com/watch?v=Gehaf7_TBAs

Barack Obama Has Called For Taxing Coal And Natural Gas -- The Two Largest Sources Of Electricity In America:

Barack Obama Told A Texas Newspaper: "What We Ought To Tax Is Dirty Energy, Like Coal And, To A Lesser Extent, Natural Gas." ("Q&A With Sen. Barack Obama," San Antonio Express-News, 2/19/08)

Coal Is The Largest Source Of Electricity In America, Accounting For Nearly 49 Percent Of U.S. Total Net Generation In 2006. (Energy Information Administration Website, www.eia.doe.gov , Accessed 6/9/08)

• "The U.S. Has The World's Largest Coal Reserves, With The Western U.S. Accounting For 55 Percent Of Current U.S. Coal Production." (Energy Information Administration Website, tonto.eia.doe.gov , Accessed 6/9/08)

Natural Gas Is The Second Largest Source Of Electricity In America, Accounting For 20 Percent Of U.S. Total Net Generation In 2006. (Energy Information Administration Website, www.eia.doe.gov , Accessed 6/9/08)

• "The U.S. Is The World's Largest Consumer And Second-Largest Producer Of Natural Gas." (Energy Information Administration Website, tonto.eia.doe.gov , Accessed 6/9/08)

Barack Obama Has Called For A $15 Billion A Year Windfall Profits Tax:

Barack Obama Is Proposing A $15 Billion A Year Windfall Profits Tax On Oil Companies. "Democratic presidential candidate Barack Obama's proposal for a windfall profits tax on oil companies could cost $15 billion a year at last year's profit levels, a campaign adviser said. ... Among the options Illinois Senator Obama is mulling is imposing a 20 percent tax on the cost of a barrel of oil above $80, said [Obama adviser Jason] Grumet, who spoke at a conference in Washington today." (Daniel Whitten, "Obama May Levy $15 Billion Tax On Oil Company Profit," Bloomberg News, 5/1/08)

The Non-Partisan Congressional Research Service Found That The Windfall Profits Tax Reduced Domestic Oil Production And Increased Our Dependence On Foreign Oil By As Much As 13 Percent. "From 1980 to 1988, the WPT may have reduced domestic oil production anywhere from 1.2% to 8.0% (320 to 1,269 million barrels). Dependence on imported oil grew from between 3% and 13%." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications For Current Energy Policy," Congressional Research Service, 3/9/06)

• The Tax Reduced Domestic Oil Supply And Increased Demand For Imported Oil. "The WPT had the effect of reducing the domestic supply of crude oil below what the supply would have been without the tax. This increased the demand for imported oil and made the United States more dependent upon foreign oil as compared with dependence without a WPT." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications For Current Energy Policy," Congressional Research Service, 3/9/06)
• During The Eight-Year Imposition Of The Windfall Profits Tax, Domestic Oil Output Fell To Its Lowest Level In Two Decades. "Skeptics who want to check the data need to search no further than the eight-year 1980s run of the energy industry windfall profit tax. During that time, domestic oil output fell to its lowest level in two decades." (Editorial, "A Bleak Future," Investor's Business Daily, 5/29/08)
• The Wall Street Journal: The Windfall Profits Tax Reduced Domestic Oil Production And Increased Prices At The Pump. "The last time Congress imposed a form of the windfall tax was the final gloomy days of Jimmy Carter, and the result was: a substantial reduction in domestic oil production (about 5%), thus raising the price of gas at the pump; and a 10% increase in U.S. reliance on foreign oil. A windfall profits tax is the ultimate act of economic masochism because it taxes only domestic production, while imports and foreign oil subsidiaries bear almost none of the cost." (Editorial, "Windfall Accounting Tax," The Wall Street Journal, 11/30/05)
• Heritage's Ben Lieberman: The Windfall Profits Tax Ended Up Harming Consumers With Increased Energy Prices. "The track record for punitive measures like the windfall profits tax shows that they usually harm consumers along with the targeted industry. ... In the end, the tax hurt consumers more through higher energy prices than it helped them through higher tax revenues, which turned out to be far lower than originally predicted because the tax discouraged production." (Ben Lieberman, "Raising Taxes On Oil Companies Is No Way To Reduce Gas Prices," www.heritage.org , 3/1/06)

Obama Plans To Pay For A Number Of His Proposals With The Tax. "The tax would help pay for a $1,000 tax cut for working families, an expansion of the earned- income tax credit and assistance for people who can't afford their energy bills." (Daniel Whitten, "Obama May Levy $15 Billion Tax On Oil Company Profit," Bloomberg News, 5/1/08)

• The Congressional Research Service Found That When The Windfall Profits Tax Was Implemented From 1980 To 1988, Gross Revenues Were Significantly Less Than Projected. "The $80 billion in gross revenues generated by the WPT between 1980 and 1988 was significantly less than the $393 billion projected." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications for Current Energy Policy," Congressional Research Service, 3/9/06)

Former Sen. John Breaux (D-LA) Said Obama's Windfall Profits Tax Is Bad Energy Policy; It "Will Produce Less Energy And Not More." MSNBC's Andrea Mitchell: "John Breaux, you are from the oil patch. How do you feel about your candidate talking about a windfall profits tax?" Former Sen. John Breaux (D-LA): "Well a windfall profits tax is not going to produce a single barrel of oil. When we had a windfall profits tax back in the 1980s, we produced less energy than before we had the tax. A windfall profits tax may make you feel good as a punitive measure against the energy companies, but until we get the guys and women who produce the energy working with those that consume it, we are never going to solve the problem. A windfall profits tax will produce less energy and not more." (MSNBC's "MSNBC Live," 6/9/08)

FLASHBACK: Obama Is Following Jimmy Carter's Economic Policies, Supporting Higher Taxes During A Time Of Economic Weakness And Imposing A Windfall Profits Tax:

Carter Raised Taxes During An Economic Decline, Which Further Weakened The Economy. "There were two other occasions in recent American history when government raised taxes going into economic decline. Herbert Hoover tried it in the early 1930s; Jimmy Carter tried it in the late 1970s. Carter was the lucky one: He got 'only' a deep recession, Hoover got the Great Depression." (Editorial, "The Gingrich Recipe," The [Memphis] Commercial Appeal, 9/14/90)

President Carter Urged Congress To Enact A Windfall Profits Tax "Without Delay." President Carter: "These [energy independence] efforts will cost money, a lot of money, and that is why Congress must enact the windfall profits tax without delay. It will be money well spent. Unlike the billions of dollars that we ship to foreign countries to pay for foreign oil, these funds will be paid by Americans to Americans. These funds will go to fight, not to increase, inflation and unemployment." (President Jimmy Carter, Speech, Washington, D.C., 7/15/79)

In The U.S. Senate, Barack Obama Voted For Higher Energy Taxes That Would Have Driven Up The Cost Of Oil And Gas In America:

Obama Voted In Favor Of An Amendment To Add A $32 Billion Tax Hike Package To The CLEAN Energy Act Of 2007. (H.R. 6, CQ Vote #223: Motion Rejected 57-36: R 10-34; D 45-2; I 2-0, 6/21/07, Obama Voted Yea)

• The Tax Hike Would Have Hurt Domestic Oil And Gas Manufacturing. "Meanwhile, most of the revenue-raising offsets in the measure would affect the oil and gas industry, which would lose a deduction for domestic manufacturing and face a new tax on operations in the Gulf of Mexico." (Richard Rubin, "Baucus Says Energy Tax Package Can Be Revived, But Details Are Sketchy," Congressional Quarterly Today, 7/10/07)
• The Tax Hike Would Have "Contributed To Higher Gasoline Prices." "[The tax increase] would have excessively burdened oil companies that operate in Louisiana and other oil-producing states. It would have discouraged oil exploration, and contributed to higher gasoline prices." (Editorial, "A Sensible Energy Policy," The [New Orleans] Times-Picayune, 6/23/07)
• A Heritage Foundation Study Found The Tax Increase Would Have Raised Gas Prices To Over $6 By 2016. "A study by the conservative Heritage Foundation think tank showed that the proposed tax increase would boost the average price of regular unleaded gasoline from $3.14 per gallon to $6.40 in 2016." (S.A. Miller, "Senate Votes To Raise Auto Mileage Standards," The Washington Times, 6/22/07)

Obama Voted At Least 3 Times To Impose A Temporary Windfall Profits Tax On Oil Companies. (S. 2020, CQ Vote #339: Motion Rejected 50-48: R 9-45; D 40-3; I 1-0, 11/17/05, Obama Voted Yea; S. 2020, CQ Vote #331: Motion Rejected 35-64: R 0-55; D 34-9; I 1-0, 11/17/05, Obama Voted Yea; S. 2020, CQ Vote #341: Motion Rejected 33-65: R 0-54; D 32-11; I 1-0, 11/17/05, Obama Voted Yea)

In The Illinois State Senate, Barack Obama Voted To Tax Natural Gas Purchased From Out Of State

In 2003, Obama Voted To Tax Natural Gas Purchases. "Creates the Gas Use Tax Law. Beginning October 1, 2003, imposes a tax upon the privilege of using in this State gas obtained in a purchase of out-of-state gas at the rate of 2.4 cents per therm [sic] or 5% of the purchase price for the billing period, whichever is the lower rate. Amends the Gas Revenue Tax Act to eliminate an exemption on October 1, 2003 and to provide that beginning with bills issued to customers on and after October 1, 2003, no tax is imposed under the Act on transactions with customers who incur a tax liability under the Gas Use Tax Law. Effective October 1, 2003." (S.B. 1733, Bill Status, www.ilga.gov , Accessed 2/11/08; S.B. 1733: Concurrence In House Amendment #4, Passed 31-27-00, 5/31/03, Obama Voted Yea)

• The Tax On Natural Gas Purchased Outside Of Illinois Was Estimated To Cost $42 Million Annually To Illinois Businesses, Making It One Of The Largest Increases In Illinois In 2003. "One of the largest increases will be a new 5 percent tax on the sales of natural gas bought from out-of-state suppliers, which could reap $42 million for the state. Virtually every manufacturer in Illinois could face increased costs as a result, business leaders said. But they doubt the increases will produce the revenue Blagojevich is counting on because businesses will move quickly to avoid the new or higher fees and taxes." (John Schmeltzer, "New Taxes And Fees Are Bad For Business, Industrial Leaders Say," Chicago Tribune, 6/2/03)
• The Natural Gas Tax Made Natural Gas More Expensive For Industrial Buyers Such As Steel Mills And Other Manufacturers. "The natural gas tax. A new policy under Blagojevich's budget will make natural gas more expensive to industrial buyers. Currently, Illinois offers an exemption on the sales tax paid for natural gas, but the new budget ends that exemption, a move that could become a major expense for steel mills and other factories that use large quantities of natural gas." (Kevin McDermott, "Area Dodged Legislative Hit On Schools, Roads," St. Louis Post-Dispatch, 6/8/03)
• The Natural Gas Tax Threatened Jobs At The Same Time That Illinois Was Leading The Nation In Jobs Lost. "Just as harmful to the state's economy are the large taxes on natural gas brought from out-of-state suppliers and the rolling stock sales tax. Both of these taxes will negatively affect important businesses as well as the employees who are dependent on these Illinois companies. I have received phone calls and letters from all sectors of the business community who reported that the projected loss of revenues due to these increased taxes and fees may well cause them to close their facilities in Illinois and move to a more business-friendly surrounding state while still serving Illinois customers. Illinois leads the nation in jobs lost. We cannot afford to drive more businesses from our state." (State Rep. Carolyn Krause, Op-Ed, "Increase Tax Incentives, Not Taxes For Businesses," Chicago Tribune, 6/13/03)