Two senators eye gas tax hike to pay for highways and bridges

A bipartisan pair of senators has urged President Obama’s
debt commission to consider raising the gas tax to pay for infrastructure
projects.

Sens. Tom Carper (D-Del.) and George Voinovich
(R-Ohio) have written to the chairmen of the National Commission on Fiscal
Responsibility and Reform advocating for a 25-cent per gallon tax increase.

“We suggest that the commission include an increase in the
federal tax on gasoline and diesel as part of your report to the president,”
they wrote. “We suggest that the taxes be increased by one cent per month for
25 months — a total of 25 cents over a three-year period.”

{mosads}The lawmakers suggest that 10 cents of the tax increase
should go to deficit reduction and 15 cents should go to funding transportation
infrastructure improvements.

It is one of many tax increases Congress is likely to
consider in the months ahead as it wrestles with finding ways to reduce the
nation’s $1.5 trillion budget deficit.

The proposal, however, seems likely to face staunch opposition from Republicans, many of whom ran on a firm anti-tax increase pledge. It is notable that Voinvoich, the GOP voice on the letter, is retiring at the end of this Congress.

He and Carper argue that the nation’s infrastructure system
is beginning to crumble.

“The Interstate Highway System is more than 50 years old and
many roadways and bridges are reaching the end of their useful life,” they
wrote. “In fact, nearly 50 percent of all bridges were built before 1966.”

The increase would more than double the current 18.4-cent
federal tax on a gallon of gas, according to a Senate aide.

Both lawmakers sit on the Environment and Public Works
Committee.

The age of the nation’s highways and bridges became a
national issue in 2007 when the Interstate 35W bridge in Minneapolis collapsed,
killing 13 people.

The letter was addressed to Erskine Bowles and former Sen.
Alan Simpson (R-Wyo.), co-chairmen of the fiscal commission, which is due to
submit its recommendations to Obama by Dec. 1.

The Treasury Department and the Congressional Budget Office
are projecting that the national highway trust fund will run out of money in a
few years, according to a Senate aide.

The tax increase, when fully implemented, would cost drivers
on average $156 a year, or $13 extra per month.

Voinovich estimates the revenues that would go to
transportation improvements would create 775,000 new jobs.

Voinovich has also questioned whether to extend the 2001 and
2003 tax cuts passed under President George W. Bush.

“My gut is probably no,” Voinovich told The Hill in
September. “I think I would probably not vote, period, for it.”

Chris Prandoni, the federal affairs manager at Americans for
Tax Reform, a group that advocates for lower taxes, panned the proposal to
increase gas taxes.

“I think the proposal by Sen. Voinovich is very discouraging
considering the recent election, which you could argue is a repudiation of
these tax and spend policies,” Prandoni said 

“We spend all this money to create jobs and we saw it didn’t
work in 2009 with the stimulus,” he said.

But Carper and Voinovich argue that taxpayers will have to
pay for the transportation improvements either way, because Congress is
expected to transfer billions of dollars from the general treasury to the trust
fund to fix roads and bridges.

They note that the CBO estimates the highway trust fund will
require $34 billion over the next six years.

“This situation will force Congress to decide between two
unacceptable solutions: additional transfers from the General Fund, which will
lead to a higher deficit, or a sharp reduction in federal transportation
funding for every state, which will create additional unemployment and
continued deterioration of infrastructure,” the senators wrote.

Prandoni of Americans for Tax Reform, however, disagrees
with that rationale.

“Taxing our way out of problems isn’t going to solve
anything,” he said.

Congress last increased the gas tax in 1993, under former
President Clinton, raising it by 4.3 cents per gallon, according to a Senate
aide.

Congress also increased the gas tax in 1990, under former
President George H. W. Bush, raising it 5 cents per gallon.

Both times lawmakers voted to increase the gas tax a portion
of the revenues went to deficit reduction.