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From the Fact Check Desk: Did the NYT Say Clinton's Gas Tax Vacation Plan Would 'Boost Oil Industry Profits'?

May 04, 2008 8:29 PM

Sen. Barack Obama's new attack ad "Boost" -- running in Indiana and North Carolina (watch the Tarheel version HERE) -- is being called into question by camp Clinton for the alleged mis-use of a quote.

Let us delve.

The quote in the ad says of Clinton's gas tax vacation proposal, "experts say it will boost oil industry profits," and it cites the New York Times on April 28, referring to a column by Paul Krugman -- generally a columnist supportive of Senator Clinton's plans.

But the column in question -- and the quote -- have nothing to do with Clinton. They have to do with Sen. John McCain's gas tax holiday proposal -- which Krugman refers to as "a measure that would, in fact, do little to help consumers, although it would boost oil industry profits."

In fact, Clinton's name doesn't appear in the column even once.

But a day later, in his blog, Krugman wrote "John McCain has a really bad idea on gasoline, Hillary Clinton is emulating him (but with a twist that makes her plan pointless rather than evil), and Barack Obama, to his credit, says no. Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount."

Krugman says that the "McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers. Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies."

And then this key sentence: "The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing."

So he suggests that Clinton's gas tax proposal will give revenues to oil companies then take them away with her "windfall profits tax."

Today on a conference call, the effervescent Phil Singer of the Clinton campaign complained that Obama's ad "actually takes a line and uses a column about criticizing Senator McCain’s approach to support the gas tax in order to criticize Senator Clinton...they are misquoting a column to make an attack on Senator Clinton."

Obama spokesman Bill Burton says that their campaign doesn't "concede that the McCain and Clinton plans are different." He adds that the Clinton proposal has been widely discredited by economists and many of Sen. Clinton's own supporters. But a debate about the merits of Clinton's proposal is not an answer as to whether the Obama campaign is quoting Krugman correctly.

Singer is on key; the Obama campaign is using that quote falsely.

- jpt

May 4, 2008 in 2008: Democrats | Permalink | Share | User Comments (64)

User Comments

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We've reached peak oil supply.
They need to talk about that.
We need to go electric now for our transportation needs.

Posted by: Jeff U'Ren | May 6, 2008 1:46:14 PM

People seem to be forgetting the "economic stimulus package" money which congress and the president approved. The Democratic leaderhip acknowledge it as short-term relief and called for a long-term economic strategy, as well. The Dems. had to compromise with the Republican opposition in order to allow Social Security beneficiaries to receive this benefit. What is the fundamental (not nit-picking) difference between the economic stimulus package and the gas tax holiday?

Posted by: Cynthia | May 6, 2008 12:52:00 PM

Most people agree the gas tax is a bad idea. 49-45 in a recent poll. What is more astonishing is that 73% think it is nothing more than political pandering. Yet somehow this issue is a winner for she who shall not be named? I am probably one of those Obama supporters people don't understand. I am not black, rather white, southern baptist, live in alabama, and astounded that somehow being an elite(usually a good thing) thinker is bad. Obama is proving that on the gas tax issue he is right about Washington and CLinton, that it is more business as usual instead of real solutions. At a time when Americans are losing jobs at an alarming rate it has been said this proposal could cost as many as 6000 jobs in Indiana in the costruction industry. Does Indiana really need 6000 more unemployed people so everyone can save 30-50 cents a day? Wake up people. we have been following the not so smart for 8 years, maybe just maybe it is time to give the "elite" guy a crack at the job. And all elite guys i know paid for their own college and took out massive student loans. Yeah those peopl are the elite not the ones who got to Wellesley and Yale while it is being paid for by staunch republican daddy.

Posted by: dave | May 5, 2008 2:48:52 PM

Hmm.

Posted by: Misty S. | May 5, 2008 1:40:36 PM

I keep hearing the supply and demand argument against the tax holiday. There are two kinds of drivers, those who will drive as much as they want regardless of the price and those who have already cut back and are barely surviving. Does anyone seriously think that by cutting the gas price by less than 20 cents a gallon is going to make the second group suddenly throw caution to the wind and consume like crazy people? Get real!!

Posted by: Firefighter | May 5, 2008 1:19:44 PM

It is important to remember that the gas tax holiday argument is a metaphor for the basic economic messages of the campaigns of Obama and Hillary.

Obama's "elite" supporters could care less about saving a few cents a day when they buy gas. Instead, they want long-term, big picture solutions. These people are not being hurt by gas prices, home mortgages, or anything else today. They are economic winners who have the luxury to think long term. By opposing a short term fix Obama is telling his supporters that he will support long term solutions, and will not be concerned much about casualties in the ranks of the economic losers.

Many of Hillary's supporters are economic losers -- people marginalized by the fast moving changes in the workplace. Hillary is saying to them that she feels their pain, and will make sure that government is there to protect them.

Posted by: David H | May 5, 2008 12:01:32 PM

OBama at NC and Indiana did nothing but negative campaigning.

Negativity soars while OBAMA ducking debates, providing no solutions.

Why doesn't anyone tell us about negativity now? The party is obviously biased sending out Joe Andrew to fix the primary while keeping Florida and Michigan disenfranchised because once revote is possible, Clinton campaign may pick up steam.

Why would the party want OBAMA? It is because Clinton will work up their rear while OBAMA is so green they can party in Washington and let OBAMA takes the blame.

Posted by: John_Lai | May 5, 2008 9:44:57 AM

Corrected some typos. I was rather passionate in writing this appeal. HRC can quote me on this one: She says nothing about the restoration of habeas corpus, your right to be charged with a crime before you are arrested, and Obama will restore your right to be charged with a crime, habeas corpus.
You can see in the first three minutes of the Pirates of the Carib. (at the worlds end) the list of freedoms and rights that have been taken from us. That movie is about present day America, cast as the oppression of Brits fighting against pirates. In reality all those rights and constitutional rights were take from YOU, during the past 7 years and HRC is saying nothing about it.
The election is not about whose minister is the dumbest. Or whether we should give 18 cents to people who drive SUV's when everyone understands you can buy a car that gets 40 MPG and be able to afford gas, and you wont drive up the demand.
This election SHOULD be about taking our civil rights back, now. Vote to uphold the constitution.
Vote for Obama and take back the national heritage our founding fathers gave us and which HRC swore on oath to uphold. She say nothing because she saw what Fox did to Bill, s she is afraid of the Fox spin, and she wants to win more than she wants to stand up for your rights as a citizen.
Vote for Obama and be a citizen, fight for our heritage and freedom now. Tell any person who fought in a war, our constitution is in peril.
Only Obama will restore it.

Posted by: bruce becker | May 5, 2008 9:40:57 AM

she can quote me on this one: She says nothing about the restoration of the habeas corpus and Obama will restore your right to be charged with a crime.
You can see in the first three minutes of the Pirates of the Carib. (at the worlds end) the list of freedoms and rights that have been taken from us. That movie is about present day America, cast as the oppression of Brits fighting against pirates. In reality all those right and constitutional righst were take from YOU, during the past 7 years and HRC is saying nothing about it.
The election is not about whose minister is the dumbest. Or whether we should give 18 cents to people who drive SUV's when everyone understands you can buy a car that gets 40 MPG and be able to afford gas, and you wont drive up the demand.
This election SHOULD be about taking our civil right back, now. Vote to uphold the constitution.
Vote for Obama and take back the national heritage our founding fathers gave us and which HRC swore on oath to uphold. She say nothing, she is afraid of the fox spin, and she wants to win more than she wants to stand up for your rights as a citizen.
Vote for Obama and be a citizen, fight for freedom now.

Posted by: bruce becker | May 5, 2008 9:37:02 AM

It would appear that if voters choose to support Hillary's gas tax holiday, only to gain $15-30 in savings over the ENTIRE summer - they're pretty desperate. That doesn't even equate to 30 cents per day!

Give up the cigarettes, or the alcohol, the hair salon or nail salon, or the fast food for a week instead. I remember having to make bigger sacrifices when I was first married and had a small child. I didn't even have $1 in the bank at the end of the month before the next payday. I scrimped and saved too.

Once again, we find that folks are ready to 'jump' on a quick buck rather than choose the solution that would truly address the oil price issue once and for all.

We Americans have been spoiled by low gas prices for years while the Europeans have paid higher prices for much longer.

We Americans take for granted the resources we have at our finger tips now - without thinking about tomorrow. This is the price we pay for that type of greed.

Preserve our oil and gas resources, our water resources, recycle more, invest in alternative energy sources (wind and water); teach our children to do the same.


Posted by: GrandmaCDA | May 5, 2008 9:28:31 AM

Clinton has already introduced legislation to try to get this gas tax lift into effect. Truth means little to Obama when a vote is emminent. Obama repeatedly voted for gas tax cuts as a state senator in Illinois and when the rest of the legislature voted against them in the end, he still voted for it.

Posted by: jkr | May 5, 2008 9:16:15 AM

All the people stating this will not help dont have a problem in their budget of paying $70 for a tank of gas.

Posted by: toby | May 5, 2008 9:16:06 AM

This argument is pointless b/c neither John McCain nor Hillary Clinton will be president by the summer, so why this proposal???

Empty promises

Posted by: Vanessa | May 5, 2008 9:00:01 AM

you can see the fear in Obama folks' posts. The handwritting is on the wall. Obama is no longer electable.

Axelrod was near hysteria on this morning's shows. He knows the numbers. And they ain't good for Obama.

The voters want the gas tax holiday under Sen. clinton's terms. Obama is going to pay a big price for his opposition, or should I say Axelrod's opposition. Axelrod made a bad gamble on this issue, and has lost!

Posted by: MC | May 5, 2008 8:50:00 AM

as usual , mr. obama lies.

mr. negative lives to lies another day

Posted by: trettin | May 5, 2008 8:49:42 AM

rd,
I am working class, not elitist. Nobody thinks I'm liberal. I am female and older than college age, if you're going to spout more generalistic demographics. In response to this specific post, she is pandering. I think that's a little worse than "testicular fortitude." I don't see the big difference this "holiday" is going to make if it means road crews getting laid off and our infrastructure falling into dangerous repair in the long term.

Posted by: softspoken22 | May 5, 2008 8:25:36 AM

Yeah...because he is black...and have the most delegates... and has the most states won...and have the most popular votes... and is honest....and is changing Washington...yeah..that's why.

Posted by: Lawrence | May 5, 2008 8:15:43 AM

If you are a Hillary supporter, you need to check your meaning of honesty, trustworthyness and integrity... is it the same that this country was founded on?

Posted by: Lawrence | May 5, 2008 8:09:24 AM

Who wants my 1/2 tank of gas.. i'll pass on the Gas tax holiday

Posted by: Lawrence | May 5, 2008 8:07:05 AM

gee cindy, you just can't let that go I see....but I bet you let the sniper fire go, didn't you?!
And now you support the gas tax holiday that will hurt folks again after the summer is over.

lol her supporters are just as deceitful and dishonest as she is.

Posted by: LA in Indiana | May 5, 2008 7:38:14 AM

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