McCain calls for suspension of federal gas tax, citing weakened economy

PITTSBURGH – Republican Sen. John McCain on Tuesday called for a summer-long suspension of the federal gasoline tax and several tax cuts as the likely presidential nominee sought to stem the public’s pain from a troubled economy.\nTimed for the day millions of Americans filed their tax returns, McCain offered some immediate steps as well as long-term proposals in a broad economic speech. The nation’s financial woes have replaced the Iraq war as the top concern for voters, and McCain, who has said economics is not his strongest suit, felt compelled to address the problems as he looks ahead to the November general election.\n“In so many ways, we need to make a clean break from the worst excesses of both political parties,” McCain told an audience at Carnegie Mellon University. “Somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose.”\nTo help people weather the downturn immediately, McCain urged Congress to institute a “gas-tax holiday” by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. By some estimates, the government would lose about $10 billion in revenue. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.\nCombined, he said, the two proposals would reduce gas prices, which would have a trickle-down effect, and “help to spread relief across the American economy.”\nAides said McCain’s Senate staff was drafting a bill on the proposal. It’s likely to face strong opposition not only from Congress but the states. The federal gasoline tax helps pay for highway projects in nearly every town through a dedicated trust fund. In the past, such proposals for gas tax holidays have not fared well as lawmakers and state and local officials prefer not to see changes in their revenue source.\nMcCain’s effort to set his own economic course – and court independents – comes as the public is craving change. A new television ad airing in parts of Pennsylvania and Ohio says “McCain will take the best ideas from both parties to spur innovation, invest in people and create jobs.”\nMcCain has faced criticism – fueled by Democrats as well as his own previous comments – that his policy strength is not economics. Democrats have argued that his free-market approach is out of step with people feeling the pinch. And, McCain has taken heat on taxes; he twice voted against cuts President Bush championed, but now advocates making them permanent because, he says, doing otherwise would amount to a tax increase.\nShortly before McCain’s speech, the Labor Department reported another worrisome sign for the economy: Inflation at the wholesale level soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly. Oil prices hit a new high, rising to more than $113 a barrel.