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Price dip adjusts Bush's gas legacy

More cash left in consumers' pockets seen as fiscal boost

By Stephen Dinan (Contact) | Tuesday, January 6, 2009

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A once-popular bumper sticker says simply, "When Bush took office, gas was $1.46." It was meant to be a slam, but as the end of his eight years approaches, President Bush is seeing gas prices that, adjusted for inflation, are lower than when he was inaugurated.

Last week's $1.59 - the average for a gallon of regular on Dec. 29, according to the Energy Information Administration - works out to $1.33 in 2001 dollars, or 9 percent less than it was the day Mr. Bush took office. The tumble in prices, from a high of more than $4.05 in early July, has meant incredible savings.

John B. Townsend II, spokesman for AAA Mid-Atlantic, said the inflation comparison doesn't mean much to consumers paying at the pump, but the drop in prices has put real money in consumers' pockets.

At gas prices' peak in July, Americans were spending $1.6 billion a day at the gas pump. Mr. Townsend said that has tumbled $1 billion in five months, and at today's prices drivers are spending about $600 million. For the average family that fills up once a week, that means paying $25 a week rather than $75.

Mr. Townsend said high prices contributed to sending the country into a recession by using up income and added that low prices could help end the downturn.

"Now we're saving this $1 billion a day, and it may be in the long run the thing that pushed us unto the recession is the thing that brings us out," he said.

Republicans said Democrats should issue a mea culpa.

"I wonder if the same people who blamed the president for the increase in prices will now credit him with the reduction in prices. It's only fair," said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell, Kentucky Republican.

Mr. Stewart said the falling prices don't obviate the need to continue to develop American sources of energy, which he said also could produce new jobs.

Gas prices famously have bedeviled Mr. Bush, including at a February press conference when he was stumped by the price at the pump.