Obama's energy rebate proposal

McCain has his gas tax holiday. Obama proposes sending more checks to help deal with the energy crunch. What's the difference?

Published July 30, 2008 4:23PM (EDT)

In his prepared remarks before a town hall meeting in Springfield, Mo., Barack Obama gave the latest iteration of his standard stump speech on economic issues. Along the way, he referenced the pain of the cost of gas, and made a promise:

To help folks who are having trouble filling up their gas tank, I'll provide an energy rebate.

It's not the first time Obama has mentioned such a plan. Proposals for an energy rebate check popped up in several of Obama's speeches made earlier in July, as part of a new $50 billion economic stimulus package. Details are sketchy -- in one speech, he promised that the rebate checks would be for "working families," while in another, he declared he would send the checks to "every American." It's also unclear how an energy rebate check would be distinguished from the more generalized tax rebate checks that were distributed in the first stimulus package.

Such distinctions are important if we want to understand whether there's any difference between John McCain's plan for a gas tax holiday and Obama's energy rebate proposal (or, for that matter, China's policy of directly subidizing energy prices).

Both plans would cost the federal government. Both are stopgaps that would do nothing to address the longer-term energy crisis.

The key difference, in principle, is that an energy rebate check could theoretically be targeted to those Americans who need it most. It could be another part of an expanded safety net that provides some security to Americans under pressure on so many different fronts.

This is why the difference between "working families" and "every American" is significant. If Obama really is proposing to write a check to help pay for gas to every American, then the plan isn't all that different from a gas tax holiday. (But if the checks were big enough, they might actually subsidize a few tanks of gas, rather than just a few gallons.)

Targeted energy rebates that went to working-class Americans dependent on their cars could provide some relief, while leaving in place the high energy prices that are the most effective way of depressing demand. Meanwhile, a gas tax holiday that might reduce prices at the pump would just encourage more consumption. And as Obama stressed during the question-and-answer period in Springfield, the best long-term solution to the energy crisis is to use less oil.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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