Momentum builds in Congress for raising the federal gas tax

The Hill – by Laura Barron-Lopez and Keith Laing

Record-low gas prices across the U.S. have given rise to fresh talk in Washington of raising the federal gas tax for the first time in over 20 years, with leading Republicans now saying a hike must not be ruled out.

The GOP has long resisted calls from business leaders and others to boost the 18.4 cent-per-gallon tax as a way to pay for upgrades to the nation’s crumbling roads and bridges.

Yet in recent days, senior Senate Republicans have said they want to keep options open and that “nothing is off the table” when weighing the best mechanisms to pay to finance infrastructure projects.  

“I just think that option is there, it’s clearly one of the options,” said Sen. Inhofe (R-Okla.), new chairman of the Senate Committee on Environment and Public Works.

Senate Finance Chairman Orrin Hatch (R-Utah) and Sen. John Thune (R-S.D.), the third-ranking Senate Republican, also said they were open to the possibility of raising the tax.

Democratic leaders in both chambers of Congress, meanwhile, declared this week that “now is the time” for an increase.

While major obstacles stand in the way — namely the House of Representatives —business groups believe there is a real chance to raise the tax in the final two years of the Obama administration.

“Comments this week from Sens. Inhofe, Hatch and Thune signal a growing recognition that the gas tax is a fair and consistent way to fund our infrastructure needs,” Association of Equipment Manufacturers spokesman Michael O’Brien said in an interview on Thursday.

Democrats have typically been more open to the idea of hiking the gas tax, but it’s the shift in Republicans’ tone that is drawing more attention to the possibility.

Inhofe argues lawmakers “don’t have a choice” but to consider raising the gas tax, which he says is more accurately called a “user fee” —  a characterization the founder of the conservative Americans for Tax Reform, Grover Norquist, has yet to sign off on.

Americans for Tax Reform said it is still opposed to the idea of increasing the gas tax, despite the recent decline in fuel prices.

“Before Congress even thinks about asking Americans to pay higher prices at the pump, it should make sure that the $33 billion the federal government collects annually from drivers is spent efficiently,” the anti-tax group said in a statement that was provided to The Hill.

The tax reform group, however,  did not say whether it would consider a gas tax hike this year a violation of its anti-tax pledge, which is signed by almost every Republican in the nation who runs for federal office.

Inhofe said he has a response to those who may pushback against considering the fee as a viable option.

“I remind my conservative friends, and people who ask the question about maybe as a part of a package having to increase the user fees, that this is what we are supposed to be doing,” Inhofe told The Hill in a brief interview.

“The user fee is very, very popular. The evidence of that is a lot of states are doing that on their own because ‘well if the federal government won’t do it we’ve got to do something about the roads,'” Inhofe said.

Thune (R-S.D.) isn’t outright for raising the tax, but stuck by comments he made during an interview with “Fox News Sunday, saying “we have to look at all options.”

Thune noted that he doesn’t think a proposal to increase the tax would garner enough votes in Congress, “unless it’s done in the context of the broader tax reform debate.”

“That is not my preference for how to fix this infrastructure issue,” Thune added.

But if its floated, he said “you would you have to reduce taxes somewhere else, you’d have to provide some tax relief.”

Similarly, Hatch (R-Utah) said that some Republicans could be enticed to back a gas tax increase if it was paired with tax cuts elsewhere.

“Personally, I think we’re going to have to change the rhetoric on that,” Hatch said Thursday.

“People who use the highways ought to pay for them,” Hatch added. “That’s a small price to pay to have the best highway system in the world. And that may be where we’re going to have to go.”

A transportation industry source told The Hill that the comments from lawmakers indicated a new willingness to consider increasing gas taxes were one of “a few significant things that happened” that happened recently.

“Most obviously, the price of gas and oil is likely to stay low for a long time, giving lawmakers some leeway to act on this,” the source said. “Even hardcore conservatives like Sen. Inhofe realize we need a long-transportation bill and that temporary patches are not helping.”

Transportation advocates have noted that the Obama administration has been leery to get behind a gas tax increase, even as it has pushed Congress for years to pass a new long-term transportation bill.

Obama’s former Transportation Secretary Ray LaHood, a Republican, has come out in favor of a gas tax hike, but only after he left the administration in 2013. Obama has argued that lawmakers should fund transportation projects other way, pushing instead for a corporate tax reform package that has gone nowhere on Capitol Hill.

The industry source said Obama’s reluctance to embrace a gas tax could actually help its prospects on Capitol Hill this year, however.

“It’s politically difficult because [the Obama administration] hasn’t gone out on a ledge, but you could make any argument that if he came out in favor of this, it would doom it,” the source said. “I don’t think if a fully-funded highway bill came to his desk, he would veto it.”

Republican congressional campaigns have meanwhile already signaled that they will attack lawmakers who support increasing the gas tax.

“The year just started and Democrats already want to raise taxes,” National Republican Congressional Committee spokeswoman Katie Prill said in a statement.

And House Republicans may not be as open to the idea as their Senate counterparts.

“My guess is there’s far more interest in the Senate than there is in the House,” said Rep. Kevin Brady (Texas), a senior Republican on the House Ways and Means Committee.

Asked about the idea during a news conference Thursday, House Speaker John Boehner (R-Ohio) said, “I’ve never voted to raise the gas tax,” though he did not expressly rule out supporting one in the future.

“A highway bill is critically important,” Boehner continued. “It’s a priority for this year. How we’ll fund it … We are going to have to work our way through this.

Sen. Rob Portman (R-Ohio) shared that sentiment, telling The Hill a gas tax hike isn’t likely.

“I don’t even see a gas tax increase happening,” Portman said, instead saying a reform to calculating the gas tax could be an option.

The gas tax, which predates the development of the Interstate Highway System by nearly two decades, has been the primary source for federal transportation projects since its creation in the 1930s.

Receipts from the gas tax have been outpaced by transportation expenses by about $16 billion annually in recent years as construction costs have risen and cars have become more fuel efficient.

The current level of federal spending on transportation is about $50 billion per year, but the gas tax only brings in about $34 billion annually at its current rate.

Transportation advocates have argued that increasing the gas tax for the first time since 1993 would be the easiest way to close the gap. Lawmakers’ reluctance to ask drivers to pay more at the pump has doomed previous attempts to increase the gas tax.

Congress has instead turned to other areas of the federal budget in recent years to close the gap. However, critics say the temporary bandages are contributing to a weakened national infrastructure.

Congress had a chance to pass a multi-year transportation funding package last year, but lawmakers could not agree on a way to pay for more than a couple of months’ worth of projects, resulting in a temporary extension that lasts only until May 2015.

The nearly $11 billion measure, which reauthorized the collection of the gas tax but did not increase it, was intended only to prevent a bankruptcy in the Department of Transportation’s Highway Trust Fund.

The trust fund had been scheduled to run out of money in September without congressional action.

Prior to the decline in gas prices, transportation advocates had suggested that the recently completed lame-duck session would have been the best time for lawmakers to raise the gas tax, because it would be more politically viable.

However, lawmakers showed little appetite for tackling the proposed hike before they wrapped up the 113th Congress.

Things appear different in the 114th, if Senate Minority Whip Dick Durbin’s (D-Ill.) comments are any indication.

“I think now is the time to do it, but we ought to do it in a thoughtful way.”

– Bernie Becker contributed

http://thehill.com/policy/energy-environment/228986-momentum-seen-in-push-for-gas-tax-hike