Three complicated, sharp-elbowed, and consequential contests ride this year on the fate of cars and people who drive them: the Republican battle for the nomination, President Obama's pursuit of reelection, and Congress's coming fight over highway funding and energy exploration.
And cars will tell the tale.
In the GOP battle for the nomination, Michigan's symbolism is worth two Iowas, three New Hampshires, and four South Carolinas. If Mitt Romney fails to win the state of his birth—the state where his father, George, governed for six years, the state that always represented a firewall in the industrial Midwest, and the state where Romney has guaranteed victory (defeat "won't happen," he said on Thursday)—then his candidacy will be mortally wounded. A Michigan defeat would render Romney's potent aura of inevitability impotent and evitable.
Romney must beat former Sen. Rick Santorum of Pennsylvania, whose lead in the six most recent polls taken since Feb. 10 has averaged 7.5 points. Romney's problem in Michigan is the same one he has had everywhere else: Republican voters don't want to buy the car. They've been kicking the tires and looking under the hood for six years and aren't sold. Romney's Michigan problem is also rooted in the tortured story of Motor City's near-death experience and federal-bailout billions (80 of them, to be exact). In 2008, Romney opposed using funds from the Troubled Asset Relief Program to keep General Motors and Chrysler afloat on the principle that big institutions with inefficient business models ought to fail. This was the hard-edged, tea party-friendly brand of conservatism Romney thought he would need in 2012. The problem now is that Romney supported TARP bailouts for big banks whose business model was not only inefficient but in many cases predatory. Santorum, too, opposed the auto bailout, but he also opposed the TARP bank bailout, giving him a leg up among conservatives who wonder why Romney's pliable conservatism so willingly contorted to the needs of bankers but not autoworkers.
For President Obama, cars and the fuel that moves them remain the biggest and most worrisome economic and political variables. This week, the national average price for a gallon of regular gasoline is $3.57, according to figures from AAA—40 cents higher than a year ago. According to GasBuddy.com, the average price per gallon is already $3.71 in Miami, $3.73 in Seattle, $3.95 in New York City, and $4.08 in Los Angeles. Nineteen states already have fuel prices above the national average. Analysts are predicting average prices of up to $4.25 per gallon for regular and prices close to or above $5 per gallon for premium by April.
Higher gas prices choked off a budding recovery early last summer, when political upheaval fueled by the Arab Spring made oil markets jittery. But nerves jangle more now as speculation intensifies about conflict with Iran on any scale. Tighter economic sanctions on Iran have rattled the markets already, and jets and bombs could unleash trading panic. The exquisitely painful irony for Obama here: As Republicans denounce him for alleged passivity on Iran, the aggressive sanctions he helped set in motion create the very market volatility likely to increase gas prices Republicans will attack. The price of a barrel of North Sea crude rose to $120 on Tuesday, when Iran halted exports to England and France. West Texas Intermediate, more commonly used in America, traded at $105.
Consumer spending was flat in December and January. Higher pump prices could dampen summer driving and tourism and force consumers to delay big-ticket purchases. It could also tighten the screws on small and medium-sized businesses operating on very tight profit margins. Even large companies might slow investments in plants and additional workers as a hedge against higher fuel costs. Gas prices remain the biggest economic X factor Obama confronts this spring.
Lastly, is this Congress, now just one full month into its second session, already over? The White House believes the routing of Republicans on the payroll tax—fully extended and not at all paid for as the GOP once demanded—draws a curtain on the short-lived legislative season. Republicans believe there's one more act—a highway bill with lots of policy attachments designed to increase domestic oil and gas exploration and extraction.
This $270 billion, five-year legislation, which the House will consider when GOP leaders can scare up the votes, has become a magnet for offshore drilling as a means of boosting federal lease revenue and domestic energy supplies. The bill calls for offshore drilling in California and along the continental shelves on the east and west coasts. Senate Democrats are adamantly opposed as is the White House. But the House GOP leadership is determined to see it pass. In a summer where gas prices could create a powerful political and economic downdraft, the conflict over jobs-generating, congestion-cutting highway construction and boosting domestic energy supplies might force interesting compromises. Even if it doesn't, this will be the spring and summer's most combustible issue.
In NASCAR, when three drivers vie for the lead and go into a turn simultaneously, it's known as driving three-wide. In this turbulent and unpredictable year, the GOP presidential field, Obama's reelection and the future of the least popular Congress in history are hurtling three-wide into the turn. Fasten your seat belts.
Don\'t Miss Today\'s
Chock full of usable information on today's issues."
Michael, Executive Director
Concise coverage of everything I wish I had hours to read about."
Chuck, Graduate Student
The day's action in one quick read."
Stacy , Director of Communications
Great way to keep up with Washington"
Ray, Professor of Economics