Obama slams gas tax holiday as gimmick

Barack Obama is not backing down in his opposition to a so-called gas tax holiday this summer. If anything, he's becoming more vocal in calling it a bad idea and slamming John McCain and Hillary Clinton for proposing it.

He told voters in Winston-Salem, N.C., this afternoon that suspending the 18.4-cent-a-gallon federal gas tax between Memorial Day and Labor Day would save them only about $25 to $30.

Some economists, he said, believe the proposal could backfire and actually raise prices by increasing demand. "We don't know that the oil companies will actually pass on the savings," he added.

And by taking revenue away from the Highway Trust Fund, which finances road and bridge repairs, the gas tax holiday could delay badly needed improvements and cost thousands of construction jobs, including 7,000 in North Carolina, he told voters.

"This is the problem with Washington," Obama declared. "We're arguing over a gimmick that will save you half a tank of gas. It's not an idea to get you through the summer. It's an idea to get them through an election."

Obama named both Clinton, his Democratic rival, and McCain, the presumptive Republican nominee. Obama did not mention that in Clinton's plan, which she outlined Monday in North Carolina, she would impose a windfall profits tax on oil companies to make up the lost revenue in the Highway Trust Fund from suspending the gas.

UPDATE: This afternoon in Indiana, Clinton said she has both a short-term plan -- the gas tax holiday -- and long-term plan -- energy efficiency and green-collar jobs -- to deal with high gas prices.

She also highlighted her proposal to levy taxes on oil companies to pay for the gas tax suspension, noting that Shell reported today that its profits rose 25 percent in the last three months over last year.

"The oil companies keep making out like bandits," she said. "They're making the highest profits in the history of the world....It's high time that they relieved the burden of high gas prices."

"Senator Obama won't provide relief, while Senator McCain won't pay for it," she added.

UPDATE: "Barack Obama doesn't understand the effect of high gas prices on the American economy," McCain spokesman Tucker Bounds said in a statement. "Senator Obama voted for a gas tax reduction before he opposed it, he has no plan for relief from record-high gas prices for Americans this summer, and he’s the empty-tank candidate in this race."

Gas prices have hit yet another record, a national average of $3.61 a gallon for regular unleaded, AAA and the Oil Price Information Service reported today.

With an average price of $3.59 in North Carolina, the gas tax suspension would amount to a 5 percent cut. North Carolina also has a 30.2-cent-a-gallon state gas tax.