Gas Tax Boost Splits Republicans in Congress, Interest Groups

By Shaun Courtney

Republicans in Congress and conservative interest groups are at odds over whether to use a gas tax increase to pay for road and bridge upgrades advocated by President Donald Trump.

Trump told a group of mayors that when he details the State of the Union on Jan. 30 it will include a proposal for $1.7 trillion in infrastructure investment. The White House has yet to lay out a specific approach to finance the plan.

The federal Highway Trust Fund faces a shortfall in 2020 without a new infusion of money. The federal motor fuels tax, which is the trust fund’s main funding source, hasn’t been increased since it was raised to 18.4 cents per gallon on gasoline and 24.4 cents on diesel in 1993.

The White House has suggested at various times that it is open to increasing the fuels tax, and some congressional Republicans—including House Transportation and Infrastructure Chairman Bill Shuster (R-Pa.)—have embraced the idea. The U.S. Chamber of Commerce is advocating a 25-cent gas tax increase to help fund improvements in the nation’s infrastructure.

Meanwhile, the advocacy groups Freedom Partners and Americans for Prosperity, both affiliated with billionaire businessmen Charles and David Koch, urged Trump in a Jan. 24 letter not to increase the fuels charge to pay for infrastructure.

“Our organizations worked hard over the past year to support your efforts and the efforts of tax-cutters in Congress to provide American families much-needed and long-overdue tax relief,” the groups wrote. “But increasing the gas tax would effectively undermine recent tax cuts by clawing back hundreds of billions of dollars—roughly 25 percent of the total benefit from tax reform.”

Congressional Republicans Divide

While Shuster has expressed support for a gas tax increase as a short-term fix for the Highway Trust Fund. Senate Environment and Public Works Committee Chairman John Barrasso (R-Wyo.) is opposed. Senate Commerce, Science, and Transportation Chairman John Thune (R-S.D.) has said he is open to the idea, but wants to see leadership from the White House.

“I think a lot of it is going to depend on where the administration is on that,” Thune said.

Thune said Trump’s comments about a $1.7 trillion plan “would be news to me.”

“We’ll get a full draft after the State of the Union,” he said.

How to Pay for Infrastructure

A leaked six-page White House “Funding Principles” document obtained earlier this week by Bloomberg Government and other news organizations included no details on how much funding would be available or where it would come from.

The Chamber has urged states to raise their gas taxes, and 39 have done so since 1993, but the business group says much more revenue is needed.

“Finding the support and funding for an infrastructure plan at the national level is a taller order,” Chamber Vice Chairman Jim Stephenson said last week at the organization’s America’s Infrastructure Summit. “It will take business support and political courage on a massive scale.”

An infrastructure bill should include the 25-cent increase, possibly with a five-cent raise over the course of each of five years, Chamber President Thomas J. Donohue suggested.

The Koch-backed groups do not offer a suggestion on where to raise new money, instead focusing on addressing inefficiencies and reducing regulatory barriers—regular talking points of administration infrastructure officials.

“Maintaining core infrastructure is an important function of government that should be carried out in the most efficient and effective manner possible,” the groups said in the letters. “Efforts to improve our nation’s infrastructure should focus on maximizing taxpayer dollars by targeting priorities such as roads and bridges, eliminating wasteful spending, removing regulatory barriers that delay projects and drive up costs, and ensuring there is proper oversight and accountability.”

Congressional Republicans reflected this conflict in their own statements.

The tax bill should have included a gas tax increase or another mechanism to pay for infrastructure, Sen. Jerry Moran (R-Kan.), a member of committees with jurisdiction over infrastructure and transportation, told Bloomberg Government.

“If we are going to have a plan, we need funding,” he said. “I hope that we do not diminish the scope of what needs to take place in infrastructure improvements and investments in this country.”

Arguments like those the Koch-backed groups are making ring hollow for Moran.

“As the economy improves all the more reason that we should use that opportunity to invest in infrastructure and as the economy improves, all the more reason we need investment infrastructure,” he said.

Moran’s colleague on both the Senate Commerce Science, and Transportation and Environment and Public Works committees, Sen. Jim Inhofe (R.-Okla.), said talk about increasing the gas tax is not productive.

“At this time it ain’t going to happen, so why waste your time on something that is off the board?” he told reporters.

To contact the reporter on this story: Shaun Courtney in Washington at scourtney@bgov.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bgov.com

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