Mitchell didn't challenge McCain adviser's "stimulus package" characterization for gas-tax holiday

››› ››› DIANNA PARKER & GREG LEWIS

On MSNBC, Andrea Mitchell twice failed to challenge claims by McCain economic adviser Carly Fiorina that a summer gas-tax holiday is "the best stimulus package we can have right now." Mitchell did not challenge Fiorina's assertions by noting the assessment by many economists that the relief to consumers would be minimal and that the plan would likely generate increased revenue for oil companies.

In separate interviews, NBC chief foreign correspondent Andrea Mitchell twice failed to challenge claims by Carly Fiorina, economic adviser to Sen. John McCain's presidential campaign, that McCain's proposal for a summer gas-tax holiday is "the best stimulus package we can have right now." In interviews with Mitchell on the July 7 editions of MSNBC's Morning Joe and MSNBC Live, Fiorina touted the plan, saying: "[T]he best stimulus package possible right now is a gas-tax holiday. Twenty-four and a half cents for every gallon of diesel fuel, 18 1/2 cents a gallon for regular fuel. ... The best way to help Americans right now where they're hurting in their pocketbook is to relieve them from federal taxes on gasoline." Mitchell did not challenge Fiorina's assertions by noting the assessment by many economists that the relief to consumers would be minimal and that the plan would likely generate increased revenue for oil companies.

According to Eric Toder of the nonpartisan Tax Policy Center, "If a gas tax holiday drives the price down by the full amount of the tax (18.4 cents), the average driver would save about $28 ($27.67) between June 1 and September 1. But we think the price would fall by only a small fraction of the 18.4 cents tax -- so instead of $28, the average driver might save $5 to $10" [emphasis in original].

An April 30 Reuters article reported that the gas tax holiday "is viewed as a bad idea by many economists." The article further stated: "Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers." Reuters quoted Greg Mankiw, former chairman of President Bush's Council of Economic Advisers, saying, "In light of the side effects associated with driving ... gasoline taxes should be higher than they are, not lower," and, "Not all of the tax relief from a gas tax holiday will be passed on to consumers. Some will likely be kept by refiners."

McCain proposed suspending the gas tax for the summer during an April 15 speech on the economy. In May, 138 economists -- including three Nobel laureates in economics -- signed a letter opposing the plan because, "[p]ut simply, suspending the federal tax on gasoline this summer is a bad idea":

There are several reasons for this opposition. First, research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers. Second, it would encourage people to keep buying costly imported oil and do nothing to encourage conservation. Third, a tax holiday would provide very little relief to families feeling squeezed. Fourth, the gas tax suspension would threaten to increase the already record deficit in the coming year and reduce the amount of money going into the highway trust fund that maintains our infrastructure.

The letter concluded, "Signers of this letter are Democrats, Republicans and Independents. This is not a partisan issue. It is a matter of good public policy."

Moreover, despite Fiorina's repeated characterizations of the gas-tax holiday as "the best stimulus package" available, Mitchell did not point out that on the April 16 edition of Fox News' Your World with Neil Cavuto, McCain said: "Let's have some straight talk. It's not a huge amount of money, but it might be nice to be able to save a few bucks and maybe buy something else the next time that they have to fill up their gas tank, and say, 'You know, I'm going to be able to afford that little extra expense now,' and a little psychological boost."

In addition to not challenging Fiorina, Mitchell later brought up Fiorina's "stimulus package" characterization of the plan in two separate interviews on MSNBC Live, with Obama economic adviser Jason Furman and Democratic strategist Ron Klain. Mitchell asked Furman: "Carly Fiorina made that point as well, that the tax holiday, the gas-tax holiday that John McCain is proposing would be the best possible stimulus package. Why not?" Furman responded in part: "I don't think we've still found an economist yet that supports that plan. And because that plan is the same economic philosophy you see John McCain unveiling today, writ large, and that's, we're going to give a tax cut to corporations and hope that they'll pass just a little part of it down to middle-class families." Later, Mitchell again asked Furman: "What about the gas-tax holiday? Isn't that a stimulus package, in that it puts more money in people's pockets, temporarily?" Later in the same hour, Mitchell had the following exchange with Klain:

MITCHELL: Well, doesn't Barack Obama have some price to pay, though, for being against the gas-tax holiday? You heard earlier in our program from Carly Fiorina and other Republicans arguing that that is a stimulus package, and that that is a good issue for John McCain.

KLAIN: Yeah. So, I think a minor, brief reduction in the gas tax isn't going to change the reality of how bad our policy failures on every front, energy policy --

MITCHELL: But it's going to put some money in the pockets of people who are facing these prices -- $4.11 at the pump.

KLAIN: Well, that's why Senator Obama supported an economic stimulus package, two more economic stimulus packages that Senator McCain continues to refuse to support, to provide immediate relief for the people who need the help right now, the people who are hurting the most from gas prices.

From the July 7 edition of MSNBC's Morning Joe:

MITCHELL: And here with us now, Republican National Committee victory chairwoman and McCain economic adviser Carly Fiorina. Good to see you, Carly. Thanks for joining us.

FIORINA: Nice to see you, Andrea.

MITCHELL: Well, let's talk about John McCain's economic speech today. Already, the Obama people have gone after him. Jason Furman, Obama's top economic adviser, yesterday saying that John McCain would not help middle-class voters, middle-class Americans who are really hurting. What is John McCain going to do for middle-class voters?

FIORINA: Well, I think two specific things. First, he has said consistently that he will phase out the alternative minimum tax, which hits middle-income voters. Secondly, he has proposed for some time now a summer gas-tax holiday, which, given the price of oil and the price of fuel at the pump, is the best stimulus package we can have right now. Twenty-four and a half cents a gallon for diesel, 18 and a half cents a gallon for regular gasoline. It's a great stimulus package.

Beyond that, John McCain is focused on making sure that this economy creates jobs. Not only are Americans losing jobs right now -- 400,000 in the last six months alone -- but many economists have said that this economy is almost on a hiring strike. Small businesses are the engine of growth in the economy. And during this tough time, it is small businesses -- the only bright spot in the economy beyond exports -- small businesses have created 233,000 jobs. So what he's talking about today is all about jobs: growing jobs, creating jobs, making sure that businesses of all sizes, but particularly small businesses, are hiring.

MITCHELL: Accurate or not, his position on free trade has been very controversial in some states, such as Michigan, where he did not do very well early on. How does he persuade people that his position in favor of free-trade agreements -- and we just saw his trip to South America last week --

FIORINA: Yeah.

MITCHELL: -- how does he argue against the Democratic position that these trade agreements actually hurt American jobs?

[...]

FIORINA: And I think these women are not single-issue voters. They want to understand where John McCain is on the issues, they want to understand where Barack Obama is on the issues, and then they'll make their choice. And we're eager to talk with them.

GEIST: And what complaint are you hearing about Barack Obama from those women?

FIORINA: Well, you know, I think, frankly, it's not about being against somebody. It's being -- it's about being for somebody. I think these are women who understand that the economy is very important. They're focused on that, they're focused on education, they're focused on health care. A lot of these women really like, for example, John McCain's summer gas-tax holiday. But I think in general, they want to make sure that they aren't taken for granted. They want to make sure that both candidates are paying attention to them and to their issues and that both candidates acknowledge what a force they are in this campaign and in this country.

MITCHELL: Thank you, Carly Fiorina, from the McCain campaign.

FIORINA: Thank you.

From the 1 p.m. ET hour of MSNBC Live on July 7:

MITCHELL: Well, it's pretty startling to hear you from the McCain campaign talking about Bill Clinton as sort of a role model for how John McCain wants to work with this Democratic Congress. Let me play you something that Robert Gibbs from the Obama campaign said on Morning Joe to us this morning.

FIORINA: OK.

ROBERT GIBBS [Obama campaign communications director, video clip]: What we need is a new direction. We need middle class tax relief. We need a jobs plan. We need a second stimulus package, which Senator Obama has offered, which Senator McCain hasn't. Because we've seen 438,000 people this year alone lose their jobs. That's unacceptable here in America, and it's something Barack Obama will change.

MITCHELL: So both Barack Obama and John McCain are talking about the need to create jobs. What's wrong with the idea of a stimulus program, a second stimulus package?

FIORINA: Well -- what I find interesting about that sound byte is the best stimulus package possible right now is a gas-tax holiday. Twenty-four and a half cents for every gallon of diesel fuel, 18 1/2 cents a gallon for regular fuel. McCain has consistently proposed that, and Barack Obama has consistently said he does not support it. The best way to help Americans right now where they're hurting in their pocketbook is to relieve them from federal taxes on gasoline. Secondly, I certainly agree that the middle class needs a tax cut. What they don't need is their taxes raised. And what they also don't need is Barack Obama saying one thing and doing another. The fact is that Barack Obama returned to Washington twice to vote for a Democratic budget proposal that would raise by three points the income tax rate on those at 25, 28, and 32 percent. In essence, what that means is someone making as little at $32,000 a year would get a tax increase.

MITCHELL: Well, Carly, I saw your --

FIORINA: So I think it's important to look at the actions behind the words.

MITCHELL: I saw in your release, the McCain campaign press release about that. We did some fact-checking and basically, he voted for a resolution that failed to continue the soon-to-be-expired Bush tax cuts. So you're calling the failure to vote for a continued cut a tax increase. Is that accurate?

[...]

MITCHELL: What about this Republican National Committee ad? Let's play it -- let me ask you about it on the other side. This is the new ad that they've unveiled, a $3 million buy in battleground states. Let's watch.

UNIDENTIFIED FEMALE [video clip]: Record gas prices. A climate in crisis. John McCain says solve it now with a balanced plan. Alternative energy, conservation, suspending the gas tax, and more production here at home. But Barack Obama -- for conservation, but he just says no to lower gas taxes, no to nuclear, no to more production, no new solutions. Barack Obama, just the party line.

MITCHELL: Carly Fiorina made that point as well, that the tax holiday, the gas-tax holiday that John McCain is proposing would be the best possible stimulus package. Why not?

FURMAN: I don't think we've still found an economist yet that supports that plan. And because that plan is the same economic philosophy you see John McCain unveiling today, writ large, and that's, we're going to give a tax cut to corporations and hope that they'll pass just a little part of it down to middle-class families. Their middle-class tax cut, itself, leaves out 101 million families. A family that does get it might get $125 in the first year. And instead, what they want to do, rather than giving the money directly to families, which is what Barack Obama would like to see done to relieve the pressure in the short run through his stimulus plan, through his tax cut in the long run, they want to give the money to companies and hope, maybe, a little bit of it gets down to some people.

MITCHELL: What about the gas-tax holiday? Isn't that a stimulus package, in that it puts more money in people's pockets, temporarily?

FURMAN: The largest beneficiaries of a gas tax holiday would be ExxonMobil, and the problem we're facing in our economy today is not that they're making profits that are too small. That's not the way to stimulate the economy. You want to start with the middle class, build the economy up from them.

[...]

MITCHELL: Ron Klain, longtime Democratic activist, former White House official, Justice Department official, now a Democratic strategist and a supporter of Barack Obama. Contributor to today's NewYorkTimes.com's Campaign Stops. Is now the economy the defining issue because of gas prices, barring some other foreign policy event?

KLAIN: Yes, Andrea, I think the economy is the defining issue in the race, and gas prices are at the forefront of that, not only the economic factor. We've had six months in a row of job loss. But every day, as people drive to work, as they go to the stores, they have to cancel their summer vacations. The reality of gas prices out of control confronts them. And the policy failures by the Bush administration, by the Republican Party, that that gas price reflects are just manifest. And I think those are powerful political winds that will be at the back of Barack Obama and the Democrats come fall.

MITCHELL: Well, doesn't Barack Obama have some price to pay, though, for being against the gas-tax holiday? You heard earlier in our program from Carly Fiorina and other Republicans arguing that that is a stimulus package, and that that is a good issue for John McCain.

KLAIN: Yeah. So, I think a minor, brief reduction in the gas tax isn't going to change the reality of how bad our policy failures on every front, energy policy --

MITCHELL: But it's going to put some money in the pockets of people who are facing these prices -- $4.11 at the pump.

KLAIN: Well, that's why Senator Obama supported an economic stimulus package, two more economic stimulus packages that Senator McCain continues to refuse to support, to provide immediate relief for the people who need the help right now, the people who are hurting the most from gas prices.

From the April 16 edition of Fox News' Your World with Neil Cavuto:

CAVUTO: I think you know, Senator, we've been in and out of another all-time high for oil and gas prices today --

McCAIN: Yeah.

CAVUTO: -- oil hovering around $114 a barrel. Many are sort of jumping on your proposal to nix the federal gas tax, about -- a little north of 18 cents, throughout the summer. Are you afraid, though, that by the time we get to the summer, we'll be up that much and more in gas prices?

McCAIN: I'm very concerned about it, Neil. And obviously, the way that it's been going up is just terrible. But I think, psychologically -- and a lot of our problems today, as you know, are psychological -- confidence, trust, uncertainty about our economic future, ability to keep our own home. This might give them a little psychological boost.

Let's have some straight talk. It's not a huge amount of money, but it might be nice to be able to save a few bucks and maybe buy something else the next time that they have to fill up their gas tank, and say, "You know, I'm going to be able to afford that little extra expense now," and a little psychological boost. That's what I think it would help.

Posted In
Economy, Taxes
Network/Outlet
MSNBC, NBC
Person
Andrea Mitchell
Stories/Interests
John McCain, 2008 Elections
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