Everywhere the American people go they find that groceries and gas are more expensive. This is President Biden’s inflation crisis and it’s estimated to cost American families approximately $5,200 more this year.
While record-high gas prices are stretching budgets and causing stress for Americans gathering around the kitchen table to take stock of their finances, the Biden administration wants you to buy an electric vehicle (EV) because there are fuel “cost savings.” While there may be fuel cost savings experienced by owners of electric vehicles, the high cost of these vehicles puts them out of reach of middle-class American families’ budgets which are strained by high inflation. The Congressional Research Service (CRS) stated in a recent study that “[electric vehicle] tax credits are disproportionately claimed by higher-income earners.” In other words, the wealthy coastal elites are receiving fuel “cost savings” while average Americans are getting soaked by high prices at the pump.
With many manufacturers continuing to build new models of electric vehicles, which are a growing share of cars on the road, it is critical that we be forward thinking about the impact of the EVs on federal policy. The impact of electric vehicles is profound in infrastructure funding policy, as there remains much to do to ensure our nation can adequately fund infrastructure priorities into the future.
Electric vehicles contribute nothing to the maintenance of our nation’s infrastructure. The Highway Trust Fund, which is funded by federal fuel excise taxes and other fees, is the primary funding source of transportation infrastructure projects. Due to our laws, EV owners aren’t paying their fair share, in part leading to the trust fund running short of funding. Since 2008, the Highway Trust Fund has received transfers totaling $143.6 billion from the general fund and other accounts, according to a May 2020 CRS report. That is not the end of the expected shortfalls. The Committee for a Responsible Federal Budget, a nonprofit and nonpartisan organization, projects that the Highway Trust Fund will experience a $215 billion shortfall through 2031 under current law. As EVs will make up a greater share of the cars on the roads as we move into the future, the Highway Trust Fund’s shortfall will similarly grow.
These shortfalls and backfilling just underscore the Highway Trust Fund’s serious long-term financial danger. How many more times is Congress going to kick the can down the road? The last infrastructure bill spent billions on EV chargers but did not demand one new cent of revenue from EV drivers to pay for it.
The cost of the status quo is too expensive. We cannot continue to transfer hundreds of billions of dollars from the Treasury to the Highway Trust Fund. This means higher deficits and greater interest payments on the debt which crowds out funding for other important programs.
Congress needs to address the long-term solvency issues of the Highway Trust Fund by ensuring all drivers pay their fair share. Funding for infrastructure projects, particularly highways and roads, have been user-fee paid for years and it is time for Congress to act to provide funding equity by ensuring EVs are paying their fair share and contributing to the maintenance of the roads they drive on.
That is why I have introduced the USER FEE Act (Using Sustainable Energy Resources to Fund Equitable e-Transportation Act) which would establish a user fee of two cents per mile traveled for EVs and one cent per mile traveled for plug-in hybrid vehicles. Under the legislation, the Department of the Treasury is directed to work with states, which oversee and regulate vehicle registration, to coordinate this program.
When Biden released his budget earlier this year, he tried to reinvent himself as fiscally responsible. If you take one look at his budget, which adds $16 trillion to the national debt, you see that isn’t true. The infrastructure bill passed last year continues to ignore the Highway Trust Fund’s insolvency.
In order to get the trust fund’s long-term financials on firmer footing, it is critical that Congress pass the USER FEE Act. This bill will ensure that electric vehicles are paying for the roads they drive on.
Rep. Lloyd Smucker represents Pennsylvania’s 11th District and serves on the House Committee on the Budget and the House Committee on Ways and Means.