Dick Morris: Warning to GOP - The Last Gas Tax Increase Cost the Dems Control of Congress
Some historians tell us that the Democrats lost Congress in 1994 because of the success of the Republican Contract with America. Some say that it was popular opposition to Hillary Clinton’s health care reform.
But the real story is that the major reason was President Bill Clinton’s decision to pass a five cent increase in the gas tax, raising it to the 18.3 cent level at which it currently stands.
Now, the president is urging a Republican Congress to imitate history and raise the gas tax higher in order to fund his infrastructure program.
Before approving the levy, Republicans would do well to understand how devastating the last gas tax increase was to the majority party in Congress.
In Democrat hands since 1954, the 40-year reign came to an end in 1994. The Contract with America had some share of the credit as did the abysmal failure of Hillary’s health care reform.
But it was the gas tax increase that polling showed moved the most votes.
Clinton had been forced into the gas tax increase by Federal Reserve Chairman Alan Greenspan, who demanded visible and irrefutable proof that the administration would really raise taxes to cut the deficit. The president pleaded that his willingness to raise the top income tax bracket to 39.6 percent ought to be indication enough of his seriousness on the issue.
But the president told me that Greenspan wanted more.
“He insists that I pass a broad-based tax,” Clinton said. “He wants me to show that I am willing to suffer politically.”
The fed chairman had power over the president because he was unwilling to cut interest rates unless he saw that the White House was really going to use fiscal policy to reign in the deficit.
And, boy did Clinton suffer.
The loss of Congress — both houses — threw his whole administration out of kilter and set the stage for an eight-year battle between the two branches of government, leading, eventually, to impeachment.
For his part, Greenspan kept his end of the deal and lowered interest rates, assuring the boom times and massive job creation of the Clinton years even as he undermined the president’s political viability in the process.
The bottom line for House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell is this: Don’t raise gas taxes.
To the elites and establishment, a nickel increase seems minor. But to working stiffs, its a very big deal.
Likely such a hike will more than overshadow any credit President Donald Trump is likely to get from his tax cut. Voters get nasty when you mess with their cars.
All the Democrat rhetoric that the Trump tax cut only benefits the rich won’t matter. But the juxtaposition of a gas tax hike and bracket cuts for the rich will make the case quite nicely.
One can only hope that the GOP recognizes a land mine before they step on it.
Dick Morris is a former adviser to President Bill Clinton as well as a political author, pollster and consultant. His most recent book, “Rogue Spooks,” was written with his wife, Eileen McGann.
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