Government must consider how its actions affect the working poor

Senate Minority Leader Mitch McConnell recently criticized a proposal from fellow Sen. Rick Scott that ”all Americans should pay some income tax to have skin in the game, even if a small amount.” That exchange reminded me how rare it is that Congress looks at the impact any government action has on segments of the population, especially the poor.

When I was at the Office of Management and Budget in the 1970s, some in Congress argued for an increase in the federal gas tax, mostly to force fuel conservation. President Gerald Ford was generally unreceptive but asked us to do an analysis on the benefits and negative consequences of a significantly higher price on gasoline There were no surprises in our report. It confirmed that drivers would indeed reduce gasoline consumption. But then we went deeper and asked whom would be affected and how.

It was clear that the segment of the population that would be disproportionately harmed was the working poor — especially those who lived in rural areas with limited or no public transportation. When we raised this problem with congressional staff, there was some discussion about giving the poor a tax credit to reimburse them for their added gasoline expense. But how do you give a tax credit to those who do not earn enough to pay taxes?

Advocates for the added gas tax were loud and persistent. President Ford said it would never happen. Motorists vote, and they would not be happy if their representative in Congress voted to increase their gas expenses. He was right. The legislation was defeated. Important to note: The disproportionate burden it would have placed on the working poor was not part of the debate.

After the 1973 oil embargo, Congress pushed us to prepare a World War II-type gas rationing plan to manage future supply disruptions. It was an awful idea. Once again, the working poor would have been significantly disadvantaged compared to other groups. We stored the ration cards we had purchased at the Treasury Department knowing we would never use them, and later had them incinerated.

That experience led me to conclude that the group least represented in the process of governing is the working poor. Most politicians claim to be champions of the middle class (that’s where the votes are), and the wealthy can take care of themselves, but what about the poor?

The federal government is mandated by federal law to prepare an environmental impact statement to “assess the potential impact of its actions significantly affecting the quality of the human environment.”

So why not a federal law to mandate a “people impact statement” to measure the impact government actions have on various segments of the population — with special attention to those who have little or no influence in the process. I recently watched a climate activist being interviewed about the high price of gasoline. He said, ”I don’t care if the price gets to 10 dollars a gallon.” Really? Tell that to the working poor who live in Montana or even in Suffolk County and must drive 30 or 40 miles one way to get to work.

A good time to start would be now. If the government decides to react to the current super-spike in gas prices, we should know how their plan will impact those who need the most help and have the least influence.

This guest essay reflects the views of Frank Zarb, energy czar under President Gerald Ford and former chairman of Nasdaq.