Senate Floor Speech
Senator Kay Bailey Hutchison
April 11, 2000 -- Page: S2496

MRS. HUTCHISON. Mr. President, I have been listening to the debate on the repeal of the 4.3-cent-a-gallon gasoline tax. I think perhaps there is a misunderstanding of what this resolution does. I will reiterate it.

The bill which Senator Lott has introduced, along with Senator Murkowski and myself, gives a Federal fuels tax holiday that would suspend through the end of this year the 4.3-cent-per-gallon gas tax that was put on about 3 or 4 years ago. If the average gasoline price in our country reaches $2 a gallon, it would suspend for the rest of this year the entire 18.4-cent-per-gallon Federal excise tax on gasoline.

The bill specifically holds harmless all of the trust funds. Social Security, and the highway trust funds would not be affected. So we would make up any lost revenue from other sources, not the highway trust fund.

I do not think the highway contractors should be alarmed. The highway contracts are going to go out just as they have been. We are now 2 years ahead in contracting. There will be no suspension of the contracting under the highway trust fund. I think our highways are a first priority, and I do not think the highway contractors should be concerned in any way that that is going to lessen to any degree.

It is very clear what this does. It says to the traveling public, it says to the family trying to take a vacation, it says to the truckers who are depending on a gasoline price that is stable, so they know what that price is going to be, approximately, when they make their contracts to haul goods back and forth in our country, we are going to have a suspension of up to 18 cents a gallon until prices come down to a level that is reasonable and that could have been anticipated when a contract was made. Airline passengers are paying $75 one way on most trips across this country because of this gasoline price increase.

We need to respond to something so basic to so many people, and that is the transportation costs--for people to take a family vacation, to drive to and from work, or for their very livelihoods, if they are truckers. We are going to respond to this crisis.

I have heard people from foreign countries say: I do not know what you Americans are complaining about; we pay $4 a gallon in Europe--in Brussels, in London. That is not the price on which our economy is based. We travel greater distances. We have an economy that is based on gasoline prices in the $1- to $1.40-a-gallon category. That is an important part of the cost of doing business in our country.

Furthermore, we do have the ability to control our own destiny. We do have the ability to drill and explore in our country. Many private businesses, small businesses, want very much to do that. They want to be able to drill a well as small as one producing only 15 barrels a day.

To put that in perspective, a 15-barrel-a-day well is a very small well. The average well in Alaska produces 650 barrels a day. In the Gulf of Mexico, it could be 10,000 barrels a day. We are talking 15 barrels a day. Our small businesses can continue to do business and make a modest profit on a 15-barrel-a-day well, but they have to know the price is going to be somewhat stable. When oil prices went down to $9, $10 a barrel, 2 years ago, these little guys could not make it. These little producers are small businesses, and they could not break even on $9 or $10 a barrel.

What I would like to propose is that we pass the bill before us today to give instant relief to the consumers and business people in our country, but that we look at the longer term issue as well, and that is, what can we do to encourage our small businesses to be able to stay in business, drilling wells that produce 15 barrels a day or less? If they will stay in business, they will produce the same amount we import from OPEC today. That is the important issue. We will not be at the whim of OPEC, to have huge price spikes, if we will encourage our own people to explore and drill even the small wells.

There is another advantage of that, and that is it keeps the jobs in America. Today we are going to foreign countries and producing because it is cheaper to do it over there in OPEC countries or in Mexico or Venezuela. It is cheap to do it there. That does not create American jobs; it creates jobs in foreign countries.

If we pass the bill before us today and say we are going to give relief immediately to the people who are driving to work, the people who depend on a stable price as they drive their trucks carrying goods back and forth across the country, I am saying let's look at the long term, too. Let's look at the stable price that is necessary for them to enter into contracts that will keep them in business. Let's do it by encouraging our small producers to take the risk to go out and drill either a dry hole or one that would produce up to 15 barrels a day, by giving them a tax credit if the price goes below $17 a barrel, so they can stay in business, much as we do for farmers when the prices they can get on the open market do not allow them to break even.

We want the farmers to stay in business so they will be able to continue to provide food for our country and for export. Why not do that for a small producer? If that well produces 16 or more barrels a day, no tax credits, because the margin, then, is much higher and they will be able to break even in the low-price times.

I am saying let's give immediate relief and let's look at the long term, let's do something that will be a win-win for our country, something that will provide more price stability so we will not have the price spikes we are seeing now. We do that by stopping our 56-percent dependence on foreign imports for the fuel we require every day in this country. Let's do it by creating more American jobs for small businesses, and let's keep those jobs in America so we will be more self-sufficient and more in control of our own destiny.

I hope my colleagues will pass the bill that is before us today, give the instant relief, and say we are going to protect the highway fund absolutely, so the contracts can continue to be let and our highways will continue to be built and improved and maintained.

I yield the floor and reserve the remainder of my time.