House Ways and Means Committee Chairman Rep. Paul Ryan (R-Wis.) said Wednesday that he is “against raising the gas tax” as lawmakers seek a solution for the looming gap in highway funding.
Transportation advocates have pushed for a gas tax increase to help pay for a long-term extension of an infrastructure funding measure that is scheduled to expire on July 31.
But Ryan started off a long-awaited hearing on the topic of infrastructure funding by ruling out such a hike.
{mosads}”Ever since we built the Interstate Highway System, we’ve had a simple principle: ‘user pays.’ The people who use the highways should pay for the highways — so far, mostly through the gas tax,” he said in his opening remarks.
“The problem is, the current ‘user pays’ system just doesn’t pay enough” Ryan continued. “Ever since 2008, the trust fund has spent more than it took in. And the reason is simple: People have been using less gas. They’re driving more fuel-efficient cars. You get a lot more miles to the gallon than you used to. And so gas just doesn’t track use as well as it used to. And we can’t just chase fuel efficiency with higher taxes.”
The gas tax, currently 18.4 cents-per-gallon, has been the traditional source of transportation funding since its inception in the 1930’s. But the tax has not been increased since 1993, and improvements in auto fuel efficiency have sapped its purchasing power.
The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually.
The Congressional Budget Office has estimated it will take about $100 billion to close the gap long enough to pay for a six-year transportation funding bill, which is the length being sought by the Obama administration and transportation supporters.
Despite that reality, Ryan said Wednesday that he is adamantly opposed to the idea of increasing the gas tax to help close the gap.
“I want to make very clear: I’m against raising the gas tax,” he said. “There’s not much happening in this economy to help it grow, but lower gas prices is one of them. Working families have been struggling for years to get by. They’ve looked high and low for good-paying jobs. Their paychecks haven’t grown much at all. And now they’re finally catching a break. It would be downright unfair to take that away from them. So we are not raising gas taxes — plain and simple.”
Lawmakers have turned to other areas of the federal budget to close the transportation funding gap in recent years, resulting in temporary fixes such as the two-month patch that was approved by lawmakers last month.
Transportation advocates have complained that the temporary extensions are preventing states from completing long-term infrastructure projects that are badly need.
“This is not just an esoteric debate about a line item in a budget,” American Trucking Associations President Bill Graves, who has advocated for a gas tax hike, told the panel in testimony submitted before Wednesday’s hearing.
“Congress’ actions have real consequences, and the decisions this committee makes will determine whether a business succeeds or fails and whether a job is created or eliminated,” Graves continued. “And most importantly, these decisions will determine the safety of the motoring public as well as the safety and efficiency of the millions of professional drivers operating daily on our highway system.”
Ryan blamed Democrats for blocking efforts to pass a transportation funding extension that would have lasted until the end of the year, which he said would have given lawmakers more time to work on a permanent infrastructure funding solution.
“I was hoping last month that we could have extended the highway trust fund through the end of the year, but that ran into last-minute opposition,” he said. “It’s going to be difficult to reach consensus on a permanent solution.”
Ryan has previously signaled he would prefer an alternative plan that would tax overseas corporate revenue to pay for a long-term transportation bill. The proposal, known as “repatriation,” calls for giving business a reprieve from penalties for avoiding prior taxes if they agree to move money back to the U.S. and pay a 6.5 percent tax rate on it.
The Obama administration has also embraced the repatriation proposal, but the president has argued tax on overseas profits should be mandatory and collected at a higher rate.
Democrats argued during Wednesday’s hearing that a gas tax increase is long overdue since the fuel levy that pays for the nation’s roads has not been raised in more than two decades.
“We haven’t made any meaningful adjustment since 1993 to the gas tax, relying on short-term fixes, gimmicks – and no matter how you slice it, adding to the deficit,” said Rep. Earl Blumenauer (D-Ore.), who has introduced legislation to increase the gas tax by 15 cents.
The Oregon lawmaker noted that the idea of increasing the gas tax has been supported by both unions and business groups in a rare display of agreement between the two sides.
“We have a unique alignment between business, labor, local government, professions, small business, truckers, AAA, bicyclists and transit,” Blumenauer said. “This is a coalition that’s broader and stronger at the local, state and federal level than any other issue.”
–This report was updated at 12:10 p.m.