The auto-related tax and rebate proposals in President Carter's energy plan came under attack from all sides yesterday, including Senate Democratic leaders.
Majority Leader Robert C. Byrd (D.W.W.) told Carter at a White House meeting with congressional leaders that the proposed tax on gas-buzzling cars should not be rebated to buyers of high-mileage models, as Carter proposed, but should be spent to improve mass transit, road and railroad beds. The rebate plan has been attacked as subsiding high-mileage foreign imports.
Senate Majority Whip Alan Cranston (D-Calif.) went further and predicted that Congress will reject the gas-guzzler rebate as well as Carter's proposal to rebate standby gasoline tax revenues to the general public. Neither leader opposed the taxes, just the proposed use of the new revenue.
But organized labor and business opposed the taxes in testimony before opposed the taxes in testimony before the House Ways and Means Committee.
And the Senate Energy Committee heard experts from the Congressional Budget Office predict that Carter may have overestimated the energy savings his program would produce by 1985 by the equivalent of about one million barrels of oil a day.
At the Ways and Means hearing, Andrew J. Biemiller, the AFL-CIO's chief lobbyist, opposed all the proposed consumer taxes. He said a gasoline tax would be a regressive sales tax, hurting most low-income persons who must drive to work. The gas-guzzler rebate would subsidize imports and cost jobs for American auto workers, he said.
The day before, Richard L. Lesher, president of the U.S. Chamber of Commerce, denounced the gasoline and "little more than a new means of redistributing the wealth." He said a tax on gas-guzzlers would be "redundant and punitive" a law requiring American auto makers to produce more efficient cars.
On Tuesday, Secretary of Transportation Brock Adams suggested to the Ways and Means Committee that it consider putting the first nickel of the gasoline tax (producing about $6 billion a year) into mass transit, energy research and road repairs instead of rebating it to the public. Adams told reporters he had argued for this within the administration on grounds that a transportation tax should be used for transportation purposes and had received Carter's permission to offer it as an alternative to the committee.
Adam's proposal would help build a constituency for a gas tax among governors, mayors, road builders and others who would benefit. There was some favorable congressional reaction to Adam's proposal, but the White House insisted it is sticking with its rebate plan.
Alice M. Rivlin, director of the Congressional Budget Office, told the Senate Energy Committee a preliminary analysis by CBO suggests that the administration has been overly optimistic about the energy savings its program would produce in the short run. Most of the program's cost would be paid before 1985, but most of its benefits would come later, she said.
CBO predicted that the reduction in gasoline consumption would be only half what the President estimated by 1985 - 5 per cent instead of 10. This would be due largely to CBO's prediction that the gasoline tax would not be triggered into effect - by failure to stay below a specified national consumption goal - until 1982.
CBO is also skeptical that the President's carrot-and-stick program can convert industry and utilities from oil and gas to coal at the rate he expects by 1985.Rivlin's energy experts estimate the oil saving from switching to coal would be 1.9 million barrels a day by 1985, instead of the 2.5 million barrels estimated by the President.
Rivlin also predicted that 70 per cent of American homes, instead of the President's goal of 90 per cent, would have been insulated by 1985 and that most would have had their drafty cracks plugged without the proposed tax credit.
Overall, Rivlin said, "it is possible that the potential 1985 oil import savings in the plan are closer to 3 1/2 million than the 4 1/2 million barrels a day assumed by the President." Savings should improve after that, she said.
Sen. Henry M. Jackson (D-Wash.), energy committee chairman who has predicted that the gasoline tax will not pass, said the nickel-a-year tax wouldn't be enough to reduce consumption. To make people drive less, the tax must have "shock effect," said Jackson. A "creeping tax" won't do, he said.
Sen. J. Benett Johnston Jr. (D-La.), who, like Jackson, will play a major role in energy legislation though neither is on the tax-writing Finance Committee, agreed with Jackson that "the gas tax is dead." This is the wrong place to fight because it won'tsave fuel, he said.