In remarks Tuesday, the presumptive Republican nominee for the presidential race 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, reported the Associated Press. 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.
In an interview with CNBC's John Harwood, McCain called high gas taxes regressive. "The people who drive the furthest are the lowest income Americans. It is incredibly regressive. Where's the fairness there?"
The American Association of State Highway and Transportation Officials blasted the proposal, saying it would devastate highway and transit programs while saving motorists an average of only $28.
AASHTO Executive Director John Horsley said, "Such a move would be short-sighted and damaging to our nation's economy, while providing little relief to America's drivers."
AASHTO estimates that for the average motorists, driving approximately 12,000 miles per year, the savings would amount to roughly $28, less than the cost of a half tank of gasoline. Using an estimate of an $8.5 billion loss in fuel tax receipts as a result of the suspension (and some estimates place it closer to $10 billion), the potential effect of such a cut would be the reduction of nearly 300,000 jobs. The proposed revenue loss would come on top of what is already a $3.2 billion shortfall in the Highway Trust Fund in September that could trigger a $13.5 billion cut in highway programs in FY 2009, unless Congress comes up with a solution, AASHTO says. McCain's proposal would add $8.5 billion to that shortfall, essentially wiping out the program next year.