Rationing: Some Pros

If there is any broad consensus in the U.S. on energy policy, it is that the nation must cut back on fuel consumption and reduce its dependence on foreign oil. But voluntarism has failed. How, then, should the power of Government be used in a large democracy to make citizens consume less energy? President Ford's package of tariffs and taxes is aimed at raising the prices of gasoline, heating oil and other petroleum products in the hope that the market mechanism will yield a reduction in demand. Ford's complex, costly and contentious proposal has not only stirred savage opposition but also raised calls in and out of Congress for a new look at an old alternative: gasoline rationing.

Generally, Americans were shocked at the prospect of gas rationing when it loomed for a time during the Arab oil embargo a year ago. But one recent poll indicates that slightly more than half of the U.S. population would now accept rationing if it were the only alternative to Ford's price plan. It is as yet unclear what kind of national constituency would back the Senate bill, introduced last week by Democratic Majority Leader Mike Mansfield of Montana and Republican Lowell Weicker of Connecticut, that mandates a nationwide rationing program "within 60 days." (Ford announced that he would veto that or any other rationing bill.) But support for rationing is probably strongest among lower-income citizens who worry most about the pocketbook impact of Ford's plan. Rationing was a key part of the AFL-CIO alternative to the Ford program presented by George Meany last week, and it will surely figure prominently in the debate over energy policy in the weeks ahead.

Would rationing be a wise approach to the nation's energy problems? Its advocates offer three basic arguments:

IT IS DIRECT. The U.S. could cut its oil imports by the goal of 1 million bbl. a day--or 5.5% of consumption--merely by printing coupons limiting what motorists can buy. Thus rationing, says one of its Senate advocates, Colorado Democrat Floyd Haskell, would have "an immediate conservation effect."

IT IS FAIR. Gasoline would be doled out according to need rather than the ability to pay. The impact of Ford's price approach, notes Senator Lee Metcalf of Montana, would be greater on the poor than on the well-to-do. Under rationing, Metcalf is persuaded, "everyone would make a sacrifice at every level." With the conservation goals contemplated today, all motorists would get coupons entitling them to 9 gal. per week.

IT IS FAMILIAR. The U.S. had gas rationing for 3 1/2 years during World War II. The Government already has 4.8 billion ration coupons, printed during the Arab oil embargo and usable at any time, stashed in five locations around the country. The coupons would be sufficient to last for three months.

But will Americans buy rationing? Those who remember the World War II experience might doubt it. Owners of the nation's 25 million cars (there are about 101 million today) endured a coupon system that determined how much they could drive. There were "A" coupons (good for up to 4 gal. per week) for people who were deemed not to need a car much, "B" or "C" coupons for those having to drive somewhat more, and "T" or "X" coupons permitting unlimited gas purchases for truckers, doctors, telephone repairmen and others whose livelihood depended upon motoring.

The AFL-CIO's associate general counsel, Thomas Harris, who was the top rationing lawyer at the wartime Office of Price Administration recalls: "Rationing gave more trouble than anything else. In large parts of the country there was no shortage of gas, and people had trouble understanding the rationale of the program. Another big problem was the severity. An "A" book hardly gave you enough gas to keep your car battery up. Then, the program had to be tailored to individuals. For instance, ministers got unlimited gasoline, so chicken sexers demanded it too--they said that they were essential to the war effort."

By the end of the war, an estimated 15% of all the "C" coupons in circulation were phony; counterfeiters had run them off to sell to conniving motorists or service-station dealers. Racketeers started a booming black market in stolen coupons. One gang even seized tickets worth 20 million gal. of gasoline from the Government's own offices in Washington.

Any rationing plan adopted today would probably be a "white market" systern; coupons would be transferable, and people who did not need all their coupons could legally sell them to those who did. White market rationing would generate less skulduggery and ill feelings than the World War II variety did. But it would still be inadequate and unfair.

The Federal Energy Administration, which would run any rationing program, last week spelled out some of the possible consequences. Coupons would go to the nation's 125 million licensed drivers; another 15 million Americans might rush to get licenses just to be able to procure coupons. The white market price of the coupons could reach $1.20 per gal.-- over and above the current average pump price of 55-c-.

More important, rationing by itself would not provide a financial incentive to the U.S. energy industry to produce more domestic oil and develop alternate forms of energy. Rationing also would not help to promote energy conservation outside of curbing the use of cars. At the same time, the FEA reckons that rationing would probably depress the gross national product by nearly $13 billion in the first year, presumably by cutting the market for new cars.

Grave Questions. Unquestionably, rationing would generate wide spread inequities. Lower-income motorists would be penalized because they tend to drive inefficient old cars that get poor gasoline mileage. Residents of rural and suburban areas would suffer more than city dwellers, because they are not served by adequate mass transit systems. A network of local rationing boards would probably be created to deal with hardship claims. But there would be much bureaucratic adjudication of minute details of Americans' private and business lives. By FEA'S estimate, rationing would require the creation of a massive bureaucracy of as many as 25,000 full-time employees. Even Senator Mansfield concedes that any rationing program would require "a lot of fine tuning."

The arguments against rationing, of course, are not necessarily arguments for President Ford's flawed program to raise tariffs and taxes. By greatly increasing the price of all oil products (gasoline and fuel oil would go up about 10-c- per gal.), it would add at least two percentage points to the cost of living index. Furthermore, U.S. producers of petro chemicals, synthetic textiles and other products that derive from oil would be at a great disadvantage in world markets because their foreign competitors would be using cheaper oil. Grave questions exist over whether enough energy would be saved to justify these high costs.

There are alternatives. One that is appealing-- because it attacks the main source of energy waste-- is a big increase in the federal tax on gas at the pump, on the order of 20-c- per gal. or more. President Ford opposes a tax increase, and Congress has little enthusiasm for it. Another alternative is receiving increasingly serious attention in Washington: phased-in reductions in oil imports coupled with mandatory conservation measures and an allocation system that would spread the impact of reduced supplies. This in effect is a form of rationing without coupons.

Ford said last week that if Congress rejects his excise-tax package, he would probably fall back on such an allocation plan. Thus allocation could be an area for future compromise between the Administration and the Democrats. For the moment, some leading Democrats are lining up behind rationing, but there is one notable exception. Washington Senator Henry Jackson, a respected energy expert on the Hill, puts it well down on his list of policy alternatives. He has not curtly dismissed rationing as "a last resort," as the President did last week. But that could be one point on which "Scoop" Jackson and Jerry Ford are at least close to agreement.

This file is automatically generated by a robot program, so viewer discretion is required.