Friday, May 09, 2008
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Best Answer to Fuel Prices
Gas tax holiday
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Editor's Desk
 
Fuel Follies
5/5/2008
Paul Page
Editor in Chief

The fumes from gasoline can make anyone a little bit dizzy, and maybe even cause some odd behavior.

How else to explain the unusual and ill-conceived actions that are springing up in the political world as fuel prices soar into the stratosphere?  

In rapid succession last month, two presidential candidates endorsed a feel-good "gas tax holiday," and three senators introduced a measure to get the federal government back into regulating contracts and transactions in the trucking industry.

Unfortunately, neither plan would do anything about the rising energy costs that are helping to strangle the American economy. Instead, both are glaring examples of poorly considered actions undertaken in the heat of the moment that would do long-term damage to transportation in the United States.

Endorsed by Sens. John McCain and Hillary Clinton in the presidential campaign, the proposal to eliminate the federal fuel tax over the summer has gotten the most attention. The plan is merely election year gimmickry that would hurt the federal budget, potentially curtail infrastructure investment and bring little real relief at the pump.

But the measure on trucking industry fuel surcharges would create far more harm in the long run to the transport economy.

Sens. Olympia Snowe, R-Maine, Gordon Smith, R-Ore., and Sherrod Brown, D-Ohio, introduced their Trust in Reliable Understanding of Consumer Costs Act last month to "free small business operators and carriers from the stranglehold of unscrupulous brokers and middlemen" who impose fuel surcharges but don't pass along the payments to operators.

What's not explained is how that stranglehold is being exerted or why 28 years of trucking industry deregulation should be pushed aside for a new round of economic regulation.

Although not as extensive as a measure that slipped through the House a couple of years ago and would have set specific fuel surcharges, the Snowe plan still amounts to economic regulation because it would establish a new layer of oversight of freight transport and payments that now operate in the free market. Of course, whatever oversight the government couldn't handle would go to the courts through litigation.

And that is the grim reality of this lamentable legislation. Wherever charges are broken out for fuel, companies and their attorneys could and would trigger plenty of costly litigation while doing little to help anyone involved in the actual transport of goods.

The TRUCC Act is a recipe for the sort of legal and regulatory debacle the trucking industry hasn't seen since the days of undercharges.

Behind all of this is the idea that transportation companies, along with oil companies and commodity speculators, are raking in profits from the rapid rise in energy costs. But the financial results from trucking companies and the thinning margins in the first quarter at C.H. Robinson, the country's largest publicly traded truck freight broker, suggest that is a very dubious proposition.

It's hard to see how a new era of economic regulation would make all that better, unless of course the fumes from high-priced fuel have gotten to you.




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