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This past weekend I was interviewed by a reporter from a Texas radio station about ways to save money at the gas pump. That interview prompted me to write about 25 Ways to Save Money on Gas. Coincidentally, at the same time the presidential candidates were slugging it out over whether the government should implement a federal gas tax ‘holiday’ this summer.

The feds levy a tax on gas equal to $0.184 per gallon (tax on diesel is $.0244). Each of the candidates has a different view on whether the government should suspend the gas tax during the summer months when families criss-cross our fine country in search of the largest ball of twine (at least that’s what we did when I was a kid). Let’s check out each of their views, and then you can cast your vote to choose which proposal you think is best.

Senator Clinton, McCain and Obama’s Gas Tax Proposals

In short, here are each of their proposals on the gas tax holiday:

Senator Clinton: She proposes suspending the federal gas tax from Memorial Day to Labor Day and imposing a ‘windfall’ tax on big oil companies to pay for it.

Senator McCain: He proposes the same suspension of the federal gas tax, but he wouldn’t tax the oil industry to pay for it.

Senator Obama: He believes we shouldn’t suspend the federal gas tax because we need the revenue to fund construction projects for roads, bridges and other infrastructure.

Now what’s become more interesting than the proposals is the candidates’ remarks about their opponent’s proposals. Senator Clinton, for example, said that Senator Obama is out of touch with the economic realities faced by ordinary citizens:

[The federal gas tax holiday] might not mean much to my opponent, but I think it means a lot to people who are struggling here, people who commute a long way to work, farmers and truckers.

Senator Obama shot back saying,

We’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something.

A McCain spokesman said that Senator Obama “does not understand the effect of gas prices on the economy. Senator Obama voted for a gas tax reduction before he opposed it.” This last point is a reference to the fact that as a state representative, Senator Obama voted at least three times in favor of temporarily lifting the state’s 5 percent sales tax on gasoline.

But the best one-liner goes to Senator Obama, who said “let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election.”

The Federal Gas Tax Holiday–Yes or No?

In my opinion, Senator Obama is the winner on this issue. First, what do you think big oil will do if the federal government imposes an 18.4 cent ‘windfall’ gas tax on the industry as Senator Clinton has proposed? Hmm, maybe raise the price of gas by, oh I don’t know, maybe 18.4 cents per gallon. Second, gas prices do hurt. But isn’t the answer to drive less, buy more efficient cars, live closer to work, telecommute, and so on? It seems the government is willing to do just about anything to keep us consuming at a breakneck pace (See Tax Rebate Checks). And while smarter money management recognizes the value even in 18.4 cents per gallon, is it really going to make that much difference to our budgets? Is it worth sacrificing the funds we need to repair and improve our country’s crumbling infrastructure?

On this issue, I side with Senator Obama. The federal gas tax holiday is political pandering at its worst. We need solutions to the country’s long-term problems, not temporary feel-good measures. But what say you?

Which federal gas tax proposal do you support?

• Senator Clinton: suspend the gas tax and make big oil pay for it
• Senator McCain: suspend the gas tax without making big oil pay for it
• Senator Obama: do nothing, the gas tax holiday proposal is a gimmick

View Results

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I’ve got an idea. Why doesn’t the U.S. government give $5,000 to every child born in the U.S.? The money can grow tax free, and the child can use the money for college when he or she finishes high school. Now I know what you’re thinking. That’s the dumbest idea you’ve ever heard. Well now just hold on there. Senator Clinton proposed this very idea last week at a forum hosted by the Congressional Black Caucus. While her aides were quick to point out that the idea was still under construction (also known as damage control), I think Clinton’s proposal deserves a thorough examination.

Over 4 million children were born in the U.S. in 2003 according to the Center for Disease Control & Prevention. The CDC report can be downloaded here, but I’ll warn you that it is a massive pdf file (116 pages). At $5,000 per child, the total tab in year one comes to over $20 billion. What amazes me almost as much as Hillary Clinton actually proposing such an idea is that she’s not the first! The Ford Foundation has made a similar proposal which you can read in an article called the Children’s Savings Accounts: Time to Push the Envelope. In response to President Bush’s proposal for individual Social Security accounts, some Democrats proposed setting up personal accounts for newborns instead. And last month Time Magazine proposed a similar plan.

The Baby Bond plan raises many questions:

• Will every baby receive $5,000, or just those from lower income families?
• What about children born before the plan goes into effect? In other words, do my teenagers get any of the dough?
• How will this money impact the cost of higher education?
• How much will it cost the government to administer this plan?
• How will the government fund the $20 billion annual cost of the plan?
• Will the $5,000 payment be indexed for inflation?
• Who will control the investment of the money?
• What happens to the money if the child dies or doesn’t go to college?
• Isn’t the U.S. a democracy?

So how have others reacted to Clinton’s Baby Bond proposal? Rudolph Giuliani said he thought the plan was “based on pandering to the point where I think they think the American people are stupid.” New York Conservative Party chief Mike Long said that “It’s a quick way of trying to buy votes, which is irresponsible when it comes to the economic future of the nation.” On the other side of the aisle, Rep. Stephanie Tubbs Jones, an Ohio Democrat, described the proposal as “a wonderful idea. … Every child born in the United States today owes $27,000 on the national debt - why not let them come get $5,000 to grow until they’re 18?” And Doug Muzzio, a political science professor at Baruch College, said the Baby Bonds plan is good politics “because it is a policy that has wide impact and addresses the concern and anxiety by Americans. It makes her an innovator.”

So what do you think? Do you give Baby Bonds a thumbs up or thumbs down? As for me, I’ll hold my opinion until we find out if the $5,000 also comes with a chicken in every pot.

How much will Hillary Clinton’s health care reform plan cost you and is it worth it? How much will you save from Mitt Romney’s proposal to eliminate tax on interest, dividends and capital gains? What are the key elements of John Edwards’ energy plan and how will it affect your pocket book? These are some of the questions that I will attempt to answer here at The Dough Roller as we move toward the presidential elections in 2008.

I have two primary goals in this series:

Goal #1: Collect information about the candidates’ proposals and make it easily accessible in one place on The Dough Roller.

Goal #2: Give you my candid assessment of the cost of each proposal and how that cost will affect you.

My goal here is not to promote a particular party or candidate. Now of course I have my own political views as we all do, and I won’t be shy about expressing those views. But I’ll express those views in the context of the financial impact on you and me of the candidates’ proposals. And that’s where the Dough-O-Meter comes in. The Dough-O-Meter is my way of quickly and easily communicating my view of a specific proposal. The Dough-O-Meter comes in 5 flavors, and here they are:

	A “1″ on the Dough-O-Meter means that the proposal is nothing short of brilliant. If the proposal calls for spending money, it’s money well spent. If the proposal is a tax cut, it’s fair and reasonable. I fully suspect that this post is the only time I’ll use this image.
	A “2″ on the Dough-O-Meter means that the proposal is, on balance, a reasonable way to spend taxpayer money.
	A “3″ on the Dough-O-Meter means that the proposal is tolerable–I can take it or leave it.
	A “4″ on the Dough-O-Meter means that the proposal would spend our money recklessly and in a way that we’ll later regret.
	A ‘5′ on the Dough-O-Meter means that our children’s children will be paying for our current government’s stupidity. I suspect this image will carry a heavy load over the next 14 months.

From the Dough-O-Meter you’ve probably guessed that I’m not a believer in big government. I also don’t believe that our government knows best when it comes to how we should live our lives. That being said, I do hope for a healthy debate about the issues. If you think I’ve got it all wrong, or if you agree with me, please leave a comment with your views on the issues. Later this week I’ll be kicking off the Dough-O-Meter series with a look at Hillary Clinton’s American Health Choices Plan (Hint: It doesn’t get a ‘1′).

Six years ago today the world changed forever. I vividly remember where I was when I first heard the news. Living close to the pentagon and having friends and family who work there, the day took on a special significance for me. One thing that 9-11 created was heroes. Firefighters, police, military, politicians, and just regular folk. What I saw that day and since are people who, when danger came, ran head first TOWARD the danger, first to help the hurting and then to fight the enemy. Amidst all the political maneuvering over the war in Iraq, I think we sometimes lose sight of these heroes. So I’d like to tell you about one of them.

At the time of 9-11 he was a retired marine. He had served in the marines as a Blackhawk pilot. He is married with three children. When we went into Iraq, he chose to come out of retirement and deploy to the Middle East for six months to help train pilots. He did this voluntarily, of course, as so many have. He called me late on the evening before his deployment and asked if he could stop by to discuss his will. Of course he could, I said, and so we sat at my kitchen table late that evening looking over his will and discussing the possibility that nobody likes to talk about. I remember looking into his eyes and seeing resolve, determination, loyalty, duty and courage. I helped him with his will, we shook hands, and he left.

So often when we hear a story like this we expect it to end badly. Fortunately, it didn’t. He deployed for six months and then returned safely to his family. But his sacrifice, and his family’s sacrifice, made me look at my life and the freedom we enjoy a little differently. It made the inconveniences on the subway each morning seem a little less inconvenient. And it made me appreciate that much more the time I have with my wife and my children.

So today I salute this hero and all the heroes that, when danger came, ran with all their energy and strength toward the danger, not from it.