Gas Prices An Issue In July And November Elections

Today’s Courier Herald Column:

To be quite frank about it, it’s hard to do anything but acknowledge that the nomination process for the Republicans attempting to find a challenger to Barack Obama is in shambles.  Somehow, a process designed to vet potential world leaders has winnowed the field down to someone who first ran for President as a Libertarian in 1988 and three other guys who haven’t won an election in at least ten years.

With each having significant flaws that will make it difficult for some segments of the Republican base to vote for them – much less the fact that some seem to downright repel independent voters – some GOPers are already preparing to change their focus to holding the House and picking up seats in the Senate.  It is hard to see how one of these guys can win a general election.

We are still some eight months and change before November’s general election, which is several eternities in political time.  One factor looms large that can change not only the Presidential election but all other elections much closer to home.  Quite simply, if gas prices are $3 per gallon it is hard to imagine one of the current potential GOP nominees beating President Barack Obama.  If gas prices are $5 per gallon, it is hard to imagine President Obama beating anyone the GOP would nominate.

Independent voters decide elections.  Voters who remain undecided late into a campaign are generally not the people who read political columns, have strong political or ideological allegiances, or even can often articulate exactly why they decided to choose a particular candidate.  Each, however, will have to touch a gas pump once or twice a week, and at $5 per gallon, would receive a direct reminder that things may not be well.

And they likely would not.  U.S. consumers spend an estimated 8.5% of their total household budget on fuel.  The cost of gas is embedded in most consumer products.  A steep jump in gas prices as is now predicted by Memorial Day – just 3 months away.  This would take the extra money out of the pockets of Americans that was recently added by the extension of the payroll tax cut, and likely stall the slight glimmers of hope seen in recent consumer spending patterns.

All of which will make it more difficult for an incumbent President to make the case he has the country on the right track.  Republicans would likely run non-stop ads about the President’s refusal to build the Keystone Pipeline, opening the U.S. up to newly discovered reserves of Canadian oil.  They would likely run 10 year old footage from Bush’s first year in office where Democrats killed drilling in Alaska’s National Wildlife refuge by stating that it would be ten years before we saw any of that oil.  “Happy Anniversary” is likely to be a general election slogan.

Lest Georgia Republicans get too giddy over the prospect that gas prices will bail out the GOP’s strategic campaign ineptness, they should remember that while Obama will get a lot of the direct blame, a surly electorate is generally anti-incumbent, not just anti-President.  The same electorate is not likely to be kind to a T-SPLOST  vote either, unlikely to raise their own taxes when their budgets are being crimped at the pump.

The AJC’s Kyle Wingfield pointed out Monday that the T-SPLOST, currently scheduled for July, may be the first electoral casualty of $4.50 gas.  As gas prices have already risen sharply and are expected to rise as much as $1 per gallon or more before the vote, there will be additional unwanted publicity prior to the vote.

Georgia motor fuel taxes are reset twice annually, with additional changes if there are extreme price changes.  Taxes will almost certainly be scheduled to increase July 1, just weeks prior to the T-SPLOST vote.  Because of precedent by both Governors Perdue and Deal, there will likely be cries for the Governor to suspend any tax increases as consumers suffer at the pump.  This would put Governor Deal in the awkward position of having to defend a gas tax increase, or reduce the amount of motor fuel taxes that would be collected to pay for transportation projects.

Either action could be used against a T-SPLOST vote.  T-SPLOST opponents can either claim that consumers can’t afford an additional 1% tax when they are paying so much more at the pump.  But if the Governor cuts the tax, they can ask how if transportation funds are so critically low how Georgia can afford to cut funds for such projects for political expediency of leaders who want to claim a tax cut just before elections yet ask taxpayers to raise their own taxes.

That same surly electorate can also choose to exercise a bit of vengeance on Republican primary ballots.  If TEA Party activists carry through with their intentions, those they choose to challenge with primary opposition may get a lift as the Taxed Enough Already base turns on Republican incumbents.  Rising gas prices may in fact be able to sink all boats.

33 comments

  1. elfiii says:

    I am 100% in favor of every effort to reduce both taxes and the size and scope of government. If bad roads is the fallout, so be it.

  2. Doug Deal says:

    There is a word that describes people who think that you can fight for control of the House and Senate and ignore the Presidency, “dreamers”.

    The Presidential race brings out voters, it is why turnout is higher here than any other cycle. If your voting block is depressed in turnout and the other side is energized, your Presidential ticket will sink the rest of your candidates like an iceberg hitting an Edwardian era steamship.

    Is it their intent for the GOP to lose 100 seats?

    • Calypso says:

      Georgian (V) era steamship, at least at the time the Titanic was launched and subsequently sunk. Though I’m sure a lot of its construction occured during the reign of Edward VII.

          • Doug Deal says:

            I don’t have a problem with smart-assery, as long as it is a good point and isn’t mean spirited. I laughed because I debated with myself what I should call the Titantic without being obvious about it.

            The Titantic’s hull was built from 1909 to 1911, which means it would have been built in both the Edwardian and Georgian(V) reigns.

  3. saltycracker says:

    Wouldn’t underestimate Obama successfully blaming the rise on oil companies trying to undermine him or a backup plan to release strategic oil reserves.

    Big business ?
    http://occupytheairwaves.wordpress.com/2012/02/21/rising-prices-at-the-pump-due-to-iran-we-dont-think-so/

    Hedge fund speculators ?
    http://thinkprogress.org/economy/2012/02/15/425926/gas-prices-rising-demand-1997/?mobile=nc

    Fear & closing refineries ?
    http://thinkprogress.org/economy/2012/02/15/425926/gas-prices-rising-demand-1997/?mobile=nc

    Or is it time to go the Maxine Waters (D) CA route & nationalize the oil companies ?

    • CobbGOPer says:

      It is all of those things that are contributing to higher gas prices. In the end, however, I really just think they’re raising prices because they can.

    • The Last Democrat in Georgia says:

      If I were a Democrat, I wouldn’t be so cocksure about Obama’s re-election chances, especially in what is still a VERY shaky economy.

      Despite all of the Republican candidates’ obvious flaws and liabilities, one can pretty much expect the Republican candidate to sweep the solidly conservative South and the Lower Midwest. There are entirely too many states that will be battlegrounds for the incumbent to assume that the General Election will be a walk for him. If anything, even with the flaws of the GOP candidates, if Obama wins re-election it will be by the skin of his teeth.

      There are also some notable battlegrounds or “purple” states that Obama won in 2008, like Indiana, North Carolina, Iowa, that Obama is not likely to win again in 2012 and others like Ohio, Florida, Virginia that are very much in question.

      Also, despite some seemingly extreme cultural views, Democrats underestimate a candidate like Santorum at their own peril as Santorum is a candidate with a background from Rust Belt Pennsylvania who knows how to tap in to the very real angst of voters struggling to stay alive in the post-industrial economy of hardscrabble Great Lakes states like Ohio, Indiana, Michigan, etc.

      $5.00-a-gallon gas may be enough to get Obama beaten decisively much like a Reagan beat Carter in 1980 as gas prices that high may be enough to evaporate the support of independents in the battlegrounds of the West that Obama is expecting to come through for him late in the race.

      • saltycracker says:

        TLDG,

        I’m hoping you’ll be (R) right but the demographics and dependencies are a lot different today.

        • The Last Democrat in Georgia says:

          The Latino (Hispanic) population of the Western states more than likely gives Obama an edge there, but states like Ohio, Michigan and, especially, Indiana, tend to have some very conservative cultural tendencies in some (but not all) respects in addition to continuing emotional angst over the decline in manufacturing in those areas.

          Santorum is a guy from Western Pennsylvania, which identifies heavily with the Midwest and Great Lakes as opposed to Eastern Pennsylvania which identifies with the Northeast, who can relate to and talk to Midwesterners on a personal level which is something that a lot of people in the mainstream media and other parts of the country can’t quite understand or fully comprehend, just like Gingrich, for all his faults, knows how to talk to and relate to Southeastern conservatives in a way that others cannot quite comprehend.

          Santorum has the working-class background to talk to middle-class and working-class white Midwestern voters in a way that a candidate like a Romney may not necessarily be able to in the GOP Primary and an Obama can’t in the General, which is why Santorum should not be taken lightly, despite his seemingly extreme social positions.

      • kyleinatl says:

        I’d be completely shocked if a cultural radical like Santorum could actually draw independent voters. The past few weeks have done him no favors, and while there’s still plenty of time to go…he hasn’t even been tested by the Obama re-election machine yet.

        You’ve got a guy who likely can’t draw independents in Santorum, and then a guy who can’t really excite the base on the other hand in Romney, you gotta do both to win…probably shoulda stuck with Newt.

  4. CobbGOPer says:

    “…Santorum is a candidate with a background from Rust Belt Pennsylvania who knows how to tap in to the very real angst of voters struggling to stay alive in the post-industrial economy…”

    Just not enough to get re-elected in his own Rust Belt state.

    • The Last Democrat in Georgia says:

      The thing that does in Santorum in Pennsylvania is that while the Western part of the state (from Erie south to Pittsburgh in an area that fits in more with Cleveland & Northern Ohio, Detroit, etc) aligns with the Midwest and the post-industrial Great Lakes and the Central part of the state tends to lean slightly towards a small-town conservatism in many respects, the slightly more highly-populated and eastern part of the state aligns more with the more liberal-dominated Eastern Seaboard and Northeastern Corridor, especially around big-city Philadelphia and the some of the seemingly rural areas outside of Allentown, Bethelhem and Scanton near the New Jersey state line which are actually exurbs of New York City (high percentage of somewhat affluent residents who commute to and from NYC on a daily basis from extreme Eastern Pennsylvania).

      • Wiregrass Dawg says:

        James Carville used to say that Penna had Philadelphia on one end, Pittsburgh on the other, and Alabama in between. 😉

  5. billdawers says:

    Just playing devil’s advocate: wouldn’t a spike in gas prices encourage some voters to think about investing more in roads to reduce congestion and in transit to provide more options to driving?

    • saltycracker says:

      When gas prices go up politicians want to cut the fuel tax.
      What isn’t in the cards is a big boost in fuel taxes dedicated to construction.

      When transit comes into play politicans want to pander to those that don’t have cars and want super cheap transportation ITP.

      Work center planning is not springboarding off light rail but roads.
      Higher gas prices will pressure more businesses to move where they can attract employees.

  6. CobbGOPer says:

    “If Tea Party activists…”

    That’s the real question: have any TP targets received a primary challenge yet? Because if not, then what good is the Tea Party? Honestly, they should be out there right now looking for a challenger to Speaker Ralston, first and foremost.

    #2 target should be Don Balfour.

  7. John Konop says:

    The oil companies have a lack of competition. We must do anything to help create competition ie natural gas, solar, nucear,wind……..Free enterprise system does work well with lack of competition.

    Also short term we must stop the aggressive stance in the Middle East. The more we scream for war with Iran the higher prices go. We need to have an off-shore less in your face foriegn policy, not the in your face ugly American foriegn policy.

    • The Last Democrat in Georgia says:

      The reason that Europeans pay so much more is because of the high taxes that their governments impose on gas to fund mass transit. Because we don’t impose those high fuel taxes, the U.S. may not have very good mass transit, but we also don’t pay nearly as much as the Euros, especially when prices are peaking. When gas prices were up over $4.00/gallon in U.S. in 2008, they were pushing between $8 and $10/gallon in Europe that year.

      • John Konop says:

        Interesting point, I would bet that because of their strong public transportation fuel prices have less of an effect on their economy. The biggest issue they face in Europe is middle class jobs moving to places like China with an aging population having generous entitlement programs. Lower real wages and an aging population is not a good combination. That is why we need a real conversation about energy policy, entitlements and trade or we will just see quicker bust and boom economic cycles with boom becoming shorter,bust becoming longer and an increase between rich and poor.

  8. Dave Bearse says:

    God forbid we use an automatic mechanism that increases taxes on road users to fund transportation, when politicians simply absolve themselves of anything to do with any increase in taxes by expecting the electorate to increase taxes on all consumers in order to subsidize transportation and fuel (pun intended) oil use and its adverse effects on the economy.

    We’re falling behind on maintenance, but it’s not that visible. Higher gas prices will drive down demand. Georgia unemployment is still high, which undermines peak period transportation demand. School will have been out for two months come July 31.

    Conditions don’t favor the perception that congestion and transportation infrastructure needs attention. The T-SPLOST is shaping up to be toast.

    • The Last Democrat in Georgia says:

      “God forbid we use an automatic mechanism that increases taxes on road users to fund transportation, when politicians simply absolve themselves of anything to do with any increase in taxes by expecting the electorate to increase taxes on all consumers in order to subsidize transportation and fuel (pun intended) oil use and its adverse effects on the economy.”

      Good point, though I suspect that Georgia politicians are staying away from increasing the gas tax not (just) because of a politicial and ideological aversion to increasing taxes, but because they may be moving towards re-jiggering the Ad valorem tax for vehicles and tags into something more akin to a “wheel tax” or “road tax” where motorists pay for tags based upon how much they drive each year (the more miles driven the more a motorist pays for their tags).

      “Conditions don’t favor the perception that congestion and transportation infrastructure needs attention. The T-SPLOST is shaping up to be toast.”

      Conditions except that I-75 N, I-75 S, I-85 N, I-285 Top End, I-20 E, I-20 W & Hwy 400, despite the extended economic downturn, are frequently still parking lots during morning and evening rush hours. The T-SPLOST is shaping up to be toast because despite its obvious good points it appears to many to be nothing more than an unfocused slush fund for opportunistic politicians and developers (what does a new flight control tower at McCollum Airport in Kennesaw have to do with relieving severe traffic congestion?).

      Though if the T-SPLOST does indeed become toast there are other much more effective ways to finance transportation needs than the T-SPLOST which ends up not necessarily doing enough by trying to do too much in the form of attempting to do a little of everything.

      For example, critically-needed and long-overdue commuter rail lines could be financed separately on their own through a combination of public-private partnerships (the type of private financing deal that the state just got out of on the I-75/575 HOT lane proposal which would work much better with passenger rail than toll lanes and toll roads) and bonds which can be paid back over time with user fees in the form of trip fares while road improvements could be paid for by diverting to road construction the one-percent of the gas tax that is not constitutionally-required to go towards road work and currently goes into the state’s general fund.

      Also improvements to the Beltline, which draws vehement objections from voters and taxpayers OTP could be financed through a separate public referendum for City of Atlanta voters only while improvements to heavy rail-anchored MARTA could be financed the same way that suburban and exurban commuter rail would be best financed which is with bonds paid back with user fees on increased and improved service (zone fares, increased fares for premium service, etc).

      Sitting around and waiting until the 12th of Never for pigs to fly and voters and taxpayers to want to willingly increase their own taxes to pay for these critically-needed transportation improvements makes absolutely no sense whatsoever.

  9. saltycracker says:

    Obama responds to gas prices: It’s the damn Republicans that won’t get behind his alternative American energy programs !

    News column:
    In a blistering election-year attack on his political foes, President Barack Obama charged Thursday that Republicans are “licking their chops” over painfully high gas prices that threaten the fragile economic recovery.

    “Only in politics do people root for bad news and they greet bad news so enthusiastically,” he said in a combative speech at the University of Miami. “You pay more, and they’re licking their chops.”

    The defiant rhetoric came after days in which the White House has worked to get off the defensive over high gasoline prices, insisting that Obama has done everything he can to bring those costs down. The administration blamed sticker shock at the pump on unrest in the Middle East, speculative trading, and heightened demand in China, Brazil, and India.

    Obama assured Americans that he feels their pain, saying the rise in gas prices “hurts everybody” and “means you’ve got to find even more room in a budget that was already tight.”

  10. seenbetrdayz says:

    Can I put the *War* in the Middle East right here at this point in the debate?

    or are we not supposed to talk about the giant gorilla in the room?

    • John Konop says:

      I agree, another Iraq war in Iran would be a disaster for our economy. We are at 4 trillion and counting not including energy prices and other commodities going sky high between the war and reconstruction.

      • seenbetrdayz says:

        Yep. I imagine that Dr. Paul is probably accurate in his claim that this is blowback from Iran sanctions. Even though Iranian exports account for a very small percentage of oil to the West, we’re experiencing the law of unintended (at least, I hope they’re unintended, I’m sure the oil companies love it, in any case) consequences. Europe felt the pinch almost immediately. We’re gonna catch the tail end of it as oil gets slightly scarcer in the E.U. and like a domino effect, the U.S. is going to feel the punch.

        200 years ago, they called it an “embargo”. The joke was that, spelled backwards, it was “O grab me”, which fit, due to the fact that it almost always came back to bite the imposing country in the ***. We can’t keep on pretending that there are no consequences for our policies abroad, and, frankly, local politicians attempting to exploit the coming rape at the pumps, in order to win over votes on a matter they are, relatively speaking, powerless to change at the local/state level is little more than a distraction from the bigger cause. I mean, tinkering with T-SPLOST, even though it does need addressing, is not going to turn the tide on rising gas prices, and it seems like too many of our state/local officials are either ignorant of the fact that their party leaders at the national level are dealing serious damage to our economy, or they’re afraid to admit it openly. I think a lot of that party-loyalty nonsense keeps Georgia democrats and republicans from criticizing their party members in D.C., and instead bring the fight within Washinton into our own front yards, as if we don’t already see enough of that.

        Hopefully, some day, our politicians are going to realize that Newton’s law (for every action, there is an equal and opposite reaction), is in full-effect.

        • seenbetrdayz says:

          In 2001, I could fill up my 1977 Ford Pickup F100 for 1.30/gal.

          Now, well, let’s just say, I’ve had to sell that truck.

      • Engineer says:

        Agreed, after all this mess we went through in Iraq and the tons of contractors sent there, you would think that we’d start seeing shipments of oil out of Iraq into the world market.

        • Harry says:

          There’s a lot of oil going out of Iraq now to India and China etc. The Iraqis gave the concessions to several big oil companies – but none American.

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