Election 2004 Bush vs. Kerry. Taxes As in 2000, the centerpiece of the Bush platform is lower taxes. As in 2000, the centerpiece of the Bush platform

Election 2004Election 2004

Bush vs. KerryBush vs. Kerry

TaxesTaxes

As in 2000, the centerpiece of the Bush As in 2000, the centerpiece of the Bush platform is lower taxes. platform is lower taxes.

Kerry insists that the Bush tax cuts have Kerry insists that the Bush tax cuts have failed and that we need to return to “Fiscal failed and that we need to return to “Fiscal Responsibility” Responsibility”

EGTRRA (2001) and JGTRRA EGTRRA (2001) and JGTRRA (2003)(2003)

Old Tax Code$0 - $26,250: 15%

$26,251 - $63,000: 28%

$63,001 - $132,000: 31%

$132,001 - $288,000: 36%

$288,000 + : 39.6%

New Tax Code$0 - $7,000: 10%

$7,001 - $28,000: 15%

$28,001 - $143,000: 25%

$143,001 - $311,000: 33%

$311,001 + : 35%


Doubled the child Tax credit from $1,000 Doubled the child Tax credit from $1,000 per child to $2000per child to $2000

Expanded dependant care credit from Expanded dependant care credit from $3,000 to $6,000 per dependant$3,000 to $6,000 per dependant

Lowered marriage penalty Lowered marriage penalty Lowered capital gains tax rate 20% to 15%Lowered capital gains tax rate 20% to 15%Dividends taxed at capital gains rate rather Dividends taxed at capital gains rate rather

than regular income ratethan regular income rateRepeal of the estate taxRepeal of the estate tax


Due to the political process, these tax cuts Due to the political process, these tax cuts are scheduled to expire after 2010. are scheduled to expire after 2010.

Kerry vs. Bush on TaxesKerry vs. Bush on Taxes

BushMake the existing tax cuts

permanent.

KerryMake the existing tax cut

permanent expect for individuals earning over $200,000

Higher Education Tax Credit (Maximum of $1500)

Health Tax Credits for employers (up t0 75% of health care premiums for small business)

Raise Exemption for Estate tax to $2M

Kerry vs. Bush on TaxesKerry vs. Bush on Taxes

BushMake the existing tax cuts

permanent.

KerryReduce the corporate tax rate

from 35% to 33.25%

Repeal tax deferral on foreign income

Tax Repatriation Holiday (special 10% tax of repatriated foreign earnings)

Targeted New Jobs Tax Credit (Tax credit for small business)

Kerry vs. Bush on Taxes (Year 1)Kerry vs. Bush on Taxes (Year 1)

Cost Cost (Billions)(Billions)

Employment Employment (Thousands)(Thousands)

GDPGDP

(Billions)(Billions)

Disposable Disposable Income per Income per CapitaCapita

BushBush -$38B-$38B +155+155 +$29+$29 $175$175

KerryKerry $7.4$7.4 -74-74 +$10.8+$10.8 -$23-$23

Kerry vs. Bush on Taxes (10 Years)Kerry vs. Bush on Taxes (10 Years)

Cost Cost (Billions)(Billions)

EmploymentEmployment

(Thousands)(Thousands)

GDP GDP (Billions)(Billions)

Disposable Disposable Income per Income per CapitaCapita

BushBush -$1,134B-$1,134B +6,237+6,237 +$669+$669 $4,620$4,620

KerryKerry -$686B-$686B +1,970+1,970 +$369+$369 $3,267$3,267

Taxes and the EconomyTaxes and the Economy

BushBush ClintonClinton AverageAverage

GDP Growth GDP Growth (Inflation (Inflation Adjusted)Adjusted)

2.7%2.7% 3.5%3.5% 3%3%

UnemploymentUnemployment 5.5%5.5% 5.6%5.6% 5.6%5.6%

Employment Employment (Establishment)(Establishment)

-800K-800K +24+24 --------

EmploymentEmployment

(Household)(Household)

+2M+2M +20+20 --------

Taxes and GrowthTaxes and Growth

Taxes and Small BusinessTaxes and Small Business

The vast majority of businesses in the US are small The vast majority of businesses in the US are small businesses: businesses: Less than 20 employees: 84%Less than 20 employees: 84% Less than 50 employees: 95%Less than 50 employees: 95%

While small business makes up a small fraction of total While small business makes up a small fraction of total employment (around 1/3), small businesses experience employment (around 1/3), small businesses experience faster employment growth on average (2.6% per year vs. faster employment growth on average (2.6% per year vs. 1.2%)1.2%)

Small business is the key source of short term Small business is the key source of short term employment fluctuations employment fluctuations

Taxes and Small BusinessTaxes and Small Business Most small businesses fall into one of three categories: Most small businesses fall into one of three categories:

Partnership: 18MPartnership: 18M S Corporation: 3MS Corporation: 3M Sole Proprietorship: 2MSole Proprietorship: 2M

All of these types of businesses are taxed under individual income All of these types of businesses are taxed under individual income Out of the top 5% of the income distribution (6M), 30% are Out of the top 5% of the income distribution (6M), 30% are

small business owners (2M)small business owners (2M) Every 10% increase in the tax rate lowers the probability of a new Every 10% increase in the tax rate lowers the probability of a new

hire by 12%hire by 12%

Kerry’s tax increase would reduce employment by roughly Kerry’s tax increase would reduce employment by roughly 240,000.240,000.

Taxes and EquityTaxes and Equity

Kerry (and many others) have complained Kerry (and many others) have complained that most of Bush’s taxes went to the top that most of Bush’s taxes went to the top 5% of the income distribution. 5% of the income distribution.

In absolute dollar terms, this is true. In absolute dollar terms, this is true. However, the top 5% was paying more However, the top 5% was paying more taxes to begin with!taxes to begin with!

Annual IncomeAnnual Income

9996

25678

43588

68994

147078

253239

500000

0 100000 200000 300000 400000 500000 600000

Lowest Fifth

2nd Fifth

3rd Fifth

4th Fifth

Top Fifth

Top 5%

Top 1%

Share of IncomeShare of Income

4

9

14

23

50

21

10

0 10 20 30 40 50 60

Lowest Fifth

2nd Fifth

3rd Fifth

4th Fifth

Top Fifth

Top 5%

Top 1%

The Bush Tax CutThe Bush Tax Cut

Effective Effective Tax Rate Tax Rate (2000)(2000)

Share Share (2000)(2000)

Effective Effective Tax Rate Tax Rate (2001)(2001)

Share Share (2001)(2001)

Lowest 5thLowest 5th 6.2%6.2% 1.2%1.2% 5.4%5.4% 1.1%1.1%

22ndnd Fifth Fifth 12.8%12.8% 5.3%5.3% 11.6%11.6% 5%5%

33rdrd Fifth Fifth 16.1%16.1% 10.3%10.3% 15.2%15.2% 10%10%

44thth Fifth Fifth 20.1%20.1% 18.7%18.7% 19.3%19.3% 18.5%18.5%

Top FifthTop Fifth 27.3%27.3% 64.4%64.4% 26.8%26.8% 65.3%65.3%

Top 5%Top 5% 30.5%30.5% 37.8%37.8% 30.1%30.1% 38.5%38.5%

Top 1%Top 1% 33.4%33.4% 22.2%22.2% 33%33% 22.7%22.7%

The Bush Tax CutThe Bush Tax CutEffective Tax Effective Tax Rate Rate (Difference)(Difference)

Share Share (Difference)(Difference)

Lowest 5thLowest 5th -.8% -.1%

22ndnd Fifth Fifth -1.2% -.3%

33rdrd Fifth Fifth -.9% -.3%

44thth Fifth Fifth -.8% -.2%

Top FifthTop Fifth -.5% +.9%

Top 5%Top 5% -.4% +.7%

Top 1%Top 1% -.4% +.5%

Taxes and the DeficitTaxes and the Deficit

0

500

1000

1500

2000

2500

1990 1992 1994 1996 1998 2000 2002

-500000

-400000

-300000

-200000

-100000

0

100000

200000

300000

Deficit

Expenditures

Taxes

Taxes and the DeficitTaxes and the Deficit

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

Expenditures(Growth)Taxes (Growth)

Healthcare Healthcare

Bush

Against re-importation of drugs

Kerry

For re-importation of drugs

Prescription Drug PricesPrescription Drug Prices

Prescription drug prices increase by an Prescription drug prices increase by an average 5% per yearaverage 5% per year

By comparison, the overall CPI increases By comparison, the overall CPI increases by an average of 3% per yearby an average of 3% per year

College tuition rises by an average 10% College tuition rises by an average 10% per yearper year

Drugs Represent a Small Portion of the U.S. Health Drugs Represent a Small Portion of the U.S. Health Care Dollar, and Have for 40 yearsCare Dollar, and Have for 40 years

Source: CMS; available at www.cms.gov

Share of National Health Care Spent on Each Category, 1962-2002

Prescription Drugs

Physician &Clinical Services

HospitalCare

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1960 1970 1980 1990 2000

Drug Spending Accounts for Only a Small Drug Spending Accounts for Only a Small Portion of Premium IncreasesPortion of Premium Increases

2003–2004 Forecasted Premium Increasesfor Plans With and Without Rx Coverage

Almost No Difference in Premium Growth for Plans that Do and Do Not Cover RxAlmost No Difference in Premium Growth for Plans that Do and Do Not Cover Rx

Source: Segal Health Plan Cost Trend Survey, 2004 Preliminary Findings edition, November 2003

14.5% 13.6%

0%

5%

10%

15%

20%

With Rx Without Rx

Ave

rage A

cross

Pla

n T

ypes

Cheaper Drugs From Canada, eh?Cheaper Drugs From Canada, eh?

Overall, prescription drugs from Canada Overall, prescription drugs from Canada are 35-55% lower. This can get as high as are 35-55% lower. This can get as high as 60-70% for some of the big names. 60-70% for some of the big names.

Pharmaceutical Prices Vary Pharmaceutical Prices Vary Across the U.S.Across the U.S.

Drug companies do not control retail prices – drugstores Drug companies do not control retail prices – drugstores generally add 20-30% to the prices charged by generally add 20-30% to the prices charged by manufacturers. Because of the large markups, retail manufacturers. Because of the large markups, retail prices can vary widely within towns and states. prices can vary widely within towns and states.

In 2002 and 2003, surveys conducted by public service In 2002 and 2003, surveys conducted by public service offices showed price differentials exist across local offices showed price differentials exist across local pharmacies.pharmacies.

Results are all similar – people can often save as much Results are all similar – people can often save as much or more shopping around in their own towns as they can or more shopping around in their own towns as they can by importing from Canadaby importing from Canada

Example: Within Arizona, Drugstore Prices Can Vary by Example: Within Arizona, Drugstore Prices Can Vary by 50% or More for the Same Prescription50% or More for the Same Prescription

Government Survey of Retail Prices, Arizona, Sept 2002

$0

$50

$100

$150

$200

$250

Alle

gra

Au

gm

en

tin

Bu

sp

ar

Cele

bre

x

Lip

ito

r

Nexiu

m

No

rvasc

Pre

vacid

Sin

gu

lair

Via

gra

Vio

xx

Xan

ax

Zo

co

r

Zo

loft

Low Price Average Price High Price

Source: Update on Prescription Drug Prices Sept 2002, Arizona Attorney General. www.attorneygeneral.state.az.us/pcalc/Prescription%20Drug%20Report%202002.pdf

US Generic Drugs Are CheaperUS Generic Drugs Are Cheaper

In Other Countries, Majority of Potential Savings From In Other Countries, Majority of Potential Savings From Importation Captured by MiddlemenImportation Captured by Middlemen

38%

16%

11%

26%

42%

33%

62%

84%

89%

74%

58%

67%

Netherlands

Germany

UK

Norway

Sweden

Denmark

Home Country Payers and Pharmacies Importers

Source: P. Kanavos, “The Economic Impact of Pharmaceutical Parallel Trade: A Stakeholder Analysis,” London School of Economics, 2004

Share of Economic Gains Captured by Importers vs Payers in Other Countries Where “Reimportation” is Allowed

Price Controls – The Price Controls – The Real DebateReal Debate

Canadian prices for innovative medicines are low for Canadian prices for innovative medicines are low for several reasons – income differences and other demand several reasons – income differences and other demand factors play a role.factors play a role.

However, the main reason why prices are different is However, the main reason why prices are different is because of because of government price controlsgovernment price controls that have been in that have been in place in Canada for over a decade.place in Canada for over a decade.

Price controls are consistent with the single-payer Price controls are consistent with the single-payer Canadian health system. That system is based on Canadian health system. That system is based on rationing care.rationing care.

Importing drugs from Canada is a way to impose Importing drugs from Canada is a way to impose price price controls controls in the U.S. market – rather than passing price in the U.S. market – rather than passing price controls directly, we can import them from Canada. But controls directly, we can import them from Canada. But price controls are not a good way to encourage innovationprice controls are not a good way to encourage innovation..

Price Controls in Canada Lead to Price Controls in Canada Lead to Months-Long Wait for Urgent CasesMonths-Long Wait for Urgent Cases

3.5

3.4

12.4

13.3

6.1

8.1

14.1

20.1

32.3

2.1

0 10 20 30 40 50

Medical Oncology

Radiation Oncology

CardiovascularSurgery

Neurosurgery

Orthopaedic Surgery

Median Wait Time (Weeks) in 2003

Wait from GP to Specialist Wait from Specialist to Treatment

Source: Fraser Institute. Waiting Your Turn: Hospital Waiting Lists In Canada. 2003, Page 47

Median Waiting Time (in Weeks) for Treatment in Canada, 2003

Medicines are No Different – Canadians Have to Wait for New Therapies, Too

86%

78%

73%

58%

53%

52%

36%

31%

Percentage of Global New Medicines Reaching

Country*

Average Delay for Products That Are Launched

(number of months between initial global launch and launch in country)

USA

Germany

Sweden

Spain

France

Italy

Poland

Portugal

4.2

8.8

7.8

15.7

14.9

17.2

20.5

22.1* Percent of 85 global launches 1994–1998 that were launched in each country by end of 1999.Source: Danzon P et al. ”The Impact of Price Regulation on the Launch Delay of New Drugs,” NBER Working Paper 9874, July 2003.

Canada 12.266%

US Consumer

s Get More

Medicines, and Get

Them More

Quickly

Net Cost: $802 Million Invested Over 12-15 Years

5,000–10,000Screened

250Enter Preclinical

Testing

5Enter

Clinical Testing

1

Compound Success Rates by Stage

New Product Development – New Product Development – A Risky and Expensive PropositionA Risky and Expensive Proposition

Source: PhRMA Pharmaceutical Industry Profile 2003, Chapter 1: Increased Length and Complexity of the Research and Development Process. And DiMasi, JA, Hansen, RW, Grabowski, HG. “The Price of Innovation: new estimates of drug development costs.” J of Health Economics. 2003:22:151-185.

Approved by the FDA

FDA Review Approval

Phase II100–300 Patient Volunteers Used to Look for Efficacy and Side Effects

Preclinical TestingLaboratory and Animal Testing

16

14

12

10

8

6

4

2

0

Discovery(2–10 Years)

Phase I 20–80 Healthy Volunteers Used to

Determine Safety and Dosage

Phase III1,000–5,000 Patient Volunteers

Used to Monitor AdverseReactions to Long-Term Use

Additional Post-Marketing Testing

YearsYears

Source: IMS Health

As a Practical Matter, (Current) Canadian Drug Supply Too As a Practical Matter, (Current) Canadian Drug Supply Too Small to Have a Real Impact in the USSmall to Have a Real Impact in the US

Total Prescriptions Filled in US vs. Canada, in Millions - 2002

0

500

1,000

1,500

2,000

2,500

3,000

3,500

US Canada

0

500

1,000

1,500

2,000

2,500

3,000

3,500

US Canada

>3.4 Billion

331 Million

After exhausting all Canadian supplies, still would need to supply medicines for

3.1 billion prescriptions

Will Re-importation lower costs?Will Re-importation lower costs?

Current estimates suggest that re-importation Current estimates suggest that re-importation will lower aggregate spending on prescription will lower aggregate spending on prescription by $40B over the next 10 years (a 1% by $40B over the next 10 years (a 1% decrease)decrease)

Will Re-importation affect safety?Will Re-importation affect safety?

Each country has an agency overseeing Each country has an agency overseeing drug manufacturing (FDA). Some drug manufacturing (FDA). Some countries have higher standards than the countries have higher standards than the US, some have lower. US, some have lower.

Safety Issues Cannot Be Safety Issues Cannot Be Ignored Ignored

State of Minnesota sent inspectors to identify State of Minnesota sent inspectors to identify good sources for Minnesotans to use to get good sources for Minnesotans to use to get Canadian drugsCanadian drugs

Inspectors announced visits in advance – and Inspectors announced visits in advance – and chose places already doing business with the US chose places already doing business with the US in large numbersin large numbers

Inspectors found major problems, including:Inspectors found major problems, including: Medicines requiring refrigeration – like insulin – being shipped without itMedicines requiring refrigeration – like insulin – being shipped without it Medicines being shipped with no labels, potentially risking patient livesMedicines being shipped with no labels, potentially risking patient lives Stores with no recall procedures in place or requiring patients to sign away Stores with no recall procedures in place or requiring patients to sign away

all of the drugstore’s liability in case of errors or other problemsall of the drugstore’s liability in case of errors or other problems Stores shipping and storing medicines that had been returned by other Stores shipping and storing medicines that had been returned by other

customerscustomers

HealthcareHealthcare

Currently, there are approximately 45M Currently, there are approximately 45M Americans without Heath InsuranceAmericans without Heath InsuranceCan’t afford it (unemployed) Can’t afford it (unemployed) Employer doesn’t provide it (Small business)Employer doesn’t provide it (Small business)Choose not to have itChoose not to have it

HealthcareHealthcareKerryKerry

Expand eligibility for Medicaid Expand eligibility for Medicaid and SCHIPand SCHIP

Cover kids up to 300% of Cover kids up to 300% of federal poverty level (FPL)federal poverty level (FPL)

Cover parents of kids up to Cover parents of kids up to 200% of FPL200% of FPL

Cover all others up to 100% Cover all others up to 100% of FPLof FPL

Kerry “swap”Kerry “swap” Federal government Federal government

assumes all costs for assumes all costs for children in Medicaid in children in Medicaid in exchange for states exchange for states expanding SCHIPexpanding SCHIP

BushBush Tax creditsTax credits

Tax credit of up to $3,000 per Tax credit of up to $3,000 per family/$1,000 per individualfamily/$1,000 per individual

Some will take as $1,000 HSA Some will take as $1,000 HSA contribution/$2,000 insurance contribution/$2,000 insurance ($300/$700 for individuals) ($300/$700 for individuals)

Non means-tested credit for Non means-tested credit for small businesses that set up small businesses that set up HSAsHSAs

Tax deduction for high-deductible Tax deduction for high-deductible insuranceinsurance Individuals who purchase low-Individuals who purchase low-

premium, high-deductible premium, high-deductible insurance policies can deduct insurance policies can deduct premium from taxable incomepremium from taxable income


Federal government would Federal government would reimburse employer insurance reimburse employer insurance plans for 75% of per person plans for 75% of per person costs that exceed a thresholdcosts that exceed a threshold

Threshold set so that Threshold set so that savings average 10 percent savings average 10 percent

Threshold= $36,000 in Threshold= $36,000 in 2006 (AEI), $30,000 2006 (AEI), $30,000 (Kerry campaign)(Kerry campaign)

To qualify, employers and To qualify, employers and insurers would have to: insurers would have to:

provide health insurance provide health insurance to to allall employees employees

adopt disease adopt disease management programsmanagement programs

pass all savings along to pass all savings along to employeesemployees



Some will take as $1,000 HSA Some will take as $1,000 HSA contribution/$2,000 contribution/$2,000 insurance ($300/$700 for insurance ($300/$700 for individuals) individuals)


Tax deduction for high-Tax deduction for high-deductible insurancedeductible insurance Individuals who purchase Individuals who purchase

low-premium, high-low-premium, high-deductible insurance policies deductible insurance policies can deduct premium from can deduct premium from taxable incometaxable income


Plans with FEHBP contracts would Plans with FEHBP contracts would offer similar plans to all comersoffer similar plans to all comers

Premium would depend on Premium would depend on risks of enrolleesrisks of enrollees

Separately priced from FEHBP Separately priced from FEHBP planplan

Tax subsidies for purchasing Tax subsidies for purchasing coverage through the CHPcoverage through the CHP



Some will take as $1,000 HSA Some will take as $1,000 HSA contribution/$2,000 contribution/$2,000 insurance ($300/$700 for insurance ($300/$700 for individuals) individuals)


Tax deduction for high-Tax deduction for high-deductible insurancedeductible insurance Individuals who purchase Individuals who purchase

low-premium, high-low-premium, high-deductible insurance policies deductible insurance policies can deduct premium from can deduct premium from taxable incometaxable income


Why is health insurance tied in with Why is health insurance tied in with employment?employment?ConvenienceConvenienceTaxesTaxesRisk PoolingRisk Pooling


The Kerry plan is superior to Bush in that it The Kerry plan is superior to Bush in that it pools small business into one grouppools small business into one group

However, it still keeps provision of benefits However, it still keeps provision of benefits at the employer levelat the employer levelHealthcare decisions should be made by Healthcare decisions should be made by

individuals rather than employersindividuals rather than employersSmall businesses do not have a comparative Small businesses do not have a comparative

advantage in negotiating with insurance advantage in negotiating with insurance companiescompanies

Tax benefits are regressiveTax benefits are regressive

An AlternativeAn Alternative

A hybrid of Bush/Kerry would be bestA hybrid of Bush/Kerry would be bestOffer tax credits to lower income households Offer tax credits to lower income households

(refundable) for the purchase of healthcare (refundable) for the purchase of healthcare insurance.insurance.

Pool small businesses and individuals into Pool small businesses and individuals into larger groups larger groups

Allow employers to facilitate health insurance, Allow employers to facilitate health insurance, but no actually supply itbut no actually supply it

Costs & Impact (Kerry)Costs & Impact (Kerry)

Newly Insured 27 MNewly Insured 27 M 25 M 25 M 26 M 26 M

$1,520$1,249

$653

0

400

800

1200

1600

$ B

illio

ns

AEI Lewin Thorpe

Costs & Impact (Bush)Costs & Impact (Bush)

Newly Insured 7 MNewly Insured 7 M 8 M 8 M 2 M 2 M

$129

$166

$91

0

50

100

150

$ B

illio

n

AEI Lewin Thorpe

EducationEducation

During his first year in office, George Bush During his first year in office, George Bush signed into law “No Child Left Behind” (NCLB)signed into law “No Child Left Behind” (NCLB) States required to set reasonable standards for math States required to set reasonable standards for math

and English. States will use annual testing for grades and English. States will use annual testing for grades 3-8. States with low performance are subject to 3-8. States with low performance are subject to corrective action.corrective action.

Schools subject to corrective action must give Schools subject to corrective action must give students the opportunity to attend other schools (and students the opportunity to attend other schools (and must provide transportation)must provide transportation)

EducationEducation

Kerry

Essentially, Kerry wishes to “Fully Fund” NCLB by increasing federal spending on education by $30B. The goal is to hire 500,000 new teachers.

Bush

Continue to implement NCLB (This would amount to increasing federal spending by $6B (Budget projections)

Federal Education SpendingFederal Education Spending

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1993 1996 1999 2002 2005estimate

2008estimate

Federal Education SpendingFederal Education Spending

0

5000

10000

15000

20000

25000

30000

35000

40000

1962 1967 1972 1977 1982 1987 1992 1997 2002 2007estimate

Education SpendingEducation Spending

Financing education is largely a state issue. Financing education is largely a state issue. Last year, the federal government spent around Last year, the federal government spent around $30B on education. This is approximately 3.5% $30B on education. This is approximately 3.5% of total spending on education ($850B)of total spending on education ($850B)

We are currently spending approximately $8,000 We are currently spending approximately $8,000 per student. per student.

Spending per student has increased Spending per student has increased approximately 400% since 1970 (about 11% per approximately 400% since 1970 (about 11% per year)year)

Most of this is aimed at lowering class sizeMost of this is aimed at lowering class size

Education SpendingEducation Spending

Does money influence educational Does money influence educational outcomes?outcomes?

AlternativesAlternatives

School VouchersSchool VouchersCharter SchoolsCharter SchoolsStronger AccountabilityStronger Accountability

Energy PolicyEnergy Policy

The US imports 9.4M barrels of oil per The US imports 9.4M barrels of oil per day. (roughly 50% of total consumption)day. (roughly 50% of total consumption)

This costs $60B per yearThis costs $60B per year

US Oil ImportsUS Oil Imports

Demand/SupplyDemand/Supply

While we are still below the record high While we are still below the record high demand of 1978 (18.8M barrels per day), demand of 1978 (18.8M barrels per day), demand has grown significantly since demand has grown significantly since 1980 (15.2M barrels/day)1980 (15.2M barrels/day)

Supply has gradually declined since its Supply has gradually declined since its early 1970 peak of 11.3M barrels/day)early 1970 peak of 11.3M barrels/day)

Demand/SupplyDemand/Supply

US Net Demand is Modest in US Net Demand is Modest in Global TermsGlobal Terms

Most of US oil imports come from a Most of US oil imports come from a small set of countriessmall set of countries

Imports are shifting to South Imports are shifting to South AmericaAmerica

Half of US Imports come from 3 Half of US Imports come from 3 countriescountries

What to do?What to do?

Increase Demand Increase Demand Reduce SupplyReduce Supply

Energy PolicyEnergy Policy

KerryAgainst ANWR drilling as well as

other environmentally sensitive areas

Royalties from oil/gas extraction to go towards energy R&D

Increase CAFÉ standard to 40mpg

Tax Credits for hybrid vehicles

BushIncrease domestic oil production

including ANWR

$1.7B for Hydrogen fuel cell research

Against increasing fuel efficiency standards

Tax Credits for hybrid vehicles

Documents

Election 2004 Bush vs. Kerry. Taxes As in 2000, the centerpiece of the Bush platform is lower taxes. As in 2000, the centerpiece of the Bush platform