Trump Surprises Lawmakers With Support For Gasoline Tax Hike
(Bloomberg) -- President Donald Trump surprised a group of lawmakers Wednesday by saying he would support a 25-cent-per-gallon increase in federal gasoline and diesel taxes to help pay for upgrading American roads, bridges and other public works.
Senator Tom Carper of Delaware, the top Democrat on the Senate Environment and Public Works Committee, said Trump unexpectedly raised the idea of the fuel-tax increase several times during a White House meeting with a dozen Republican and Democratic lawmakers from key House and Senate committees.
“While there are a number of issues on which President Trump and I disagree, today, we agreed that things worth having are worth paying for,” Carper said in a statement. “The president even offered to help provide the leadership necessary so that we could do something that has proven difficult in the past.”
Trump previously has said he would consider raising the federal gasoline tax, which hasn’t been increased since 1993. But it’s not been part of the discussion on his infrastructure plan, and it’s an idea that many Republicans and some Democrats have dismissed. Axios reported earlier that Trump endorsed a 25-cent increase during the meeting.
Oregon Representative Peter DeFazio of Oregon, the top Democrat on the House Transportation and Infrastructure Committee, who also attended the meeting, said the president told lawmakers he also would be willing to increase the amount of federal spending beyond the $200 billion over 10 years that the administration is seeking for his infrastructure program.
A White House official declined to comment on Trump’s discussions in the closed-door meeting but said that all options were on the table to meet the main objectives of the president’s plan.
“The president made a living building things, and he realizes that to build things takes money, takes investment,” DeFazio said.
Pennsylvania Representative Bill Shuster, the chairman of the House Transportation and Infrastructure Committee, has encouraged his Republican colleagues to consider raising the gas tax as a way to keep the Highway Trust Fund -- which finances road, bridge and transit projects -- solvent after 2021. He said there was discussion during the meeting about funding.
“He understands that we’ve got to figure out the funding levels and where the money’s coming from, make sure it’s not smoke and mirrors,” Shuster said of the president.
Groups including the U.S. Chamber of Commerce and the American Trucking Associations support the idea of increasing the gas tax as the most efficient and easiest way to generate more money for projects, and the White House has been neutral.
“We support the president’s big and bold vision for strengthening American infrastructure,” Chris Spear, president and chief executive officer of the American Trucking Associations, said in a statement. “Because it is a user fee, the fuel tax is the most conservative, cost-effective and viable solution to making that vision a reality.”
But key Republican leaders have already rejected the idea, and other entities, including the political network led by billionaire industrialists Charles and David Koch, are also opposed.
“Increasing the gas tax is the wrong approach to addressing our nation’s infrastructure needs,” Brent Gardner, the chief government affairs officer at Americans for Prosperity, a Koch-affiliated group, said in a statement on Wednesday.
“The American people are just beginning to feel the benefits of the recently passed tax cuts bill," Gardner said. "Instead of undermining the relief taxpayers just received, the president and Congress should focus on smarter spending and breaking through the regulatory gridlock that delays projects and drives up costs.”
Senator John Barrasso of Wyoming, the chairman of the Senate Environment and Public Works Committee, said he opposes raising the gas tax because not all drivers who now use the roads pay the tax, and not all of the money collected goes toward repairing and restoring infrastructure.
“Today was the first of many conversations about the president’s infrastructure plan and how to fund it,” Barrasso said in a statement. “Ultimately, the final decision will be made by Congress as a whole.”
Republican Senator Charles Grassley said raising the tax was unlikely to even come up for a vote in the Senate. “He’ll never get it by McConnell,” Grassley said, referring to Senate Majority Leader Mitch McConnell
Revenue from the federal per-gallon taxes of 18.4 cents on gasoline and 24.4 cents on diesel has declined over the years as inflation eroded their purchasing power and the average fuel economy of a passenger vehicle increased.
Trump’s infrastructure plan seeks to revamp how projects are approved and financed by reducing permitting time to two years and allocating $200 billion over 10 years -- mostly as incentives to spur states, localities and the private sector to spend at least $1.3 trillion. The administration released its 53-page plan Monday as a blueprint for Congress to draft legislation.
©2018 Bloomberg L.P.