Unlikely partners Chamber, AFL-CIO: Raise gas tax to fund infrastructure fixes

The nation’s biggest labor and business groups came together on Wednesday to urge Congress to find a new source of funding for infrastructure projects, possibly through an increase to the gas tax.
 
AFL-CIO President Richard Trumka and U.S. Chamber of Commerce President Thomas Donohue joked about their unlikely partnership but said they are serious about finding a way to provide long-term funding for the nation’s highways, bridges, railways and ports.

During a hearing of the Senate Environment and Public Works Committee on infrastructure spending, Donohue and Trumka said there needs to be an “appropriate” increase in the federal fuel tax.

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“The gas tax has not been raised since 1993,” Trumka said. “It provides diminishing levels of funding and should be raised.”

“Seventeen years is a long time” to go without an increase to the tax, Donohue said.

The federal gas tax is 18.4 cents a gallon. Some states have implemented their own increases to pay for infrastructure improvements.

Sen. Tom Carper (D-Del.), a member of the panel, has suggested gradually increasing the gas tax to provide more cash for the Highway Trust Fund to help repair and improve the nation’s infrastructure.

“While there is a growing consensus that investing in our infrastructure is the first, best thing Congress can do for our short- and long-term economic success, there is no such consensus on how to fund it at the level it requires,” Trumka told the panel.

The Obama administration has expressed opposition to an increase in the gas tax, arguing that any tax increases during the economic downturn would prove detrimental to the recovery.

The issue also has brought together panel Chairwoman Barbara Boxer (D-Calif.) and ranking member James Inhofe (R-Okla.).

“We don’t get along with you [Democrats] on environment issues,” Inhofe said. “We’re together on this very significant issue. There’s not a person up here who doesn’t look at dire straits that we’re in.”

Donohue emphasized the need for policymakers to agree on a way forward for infrastructure, assess the cost and then determine how to leverage enough cash to pay for a long-term plan.

“There should be no further delay on a multiyear authorization of the federal highway and public transportation programs,” Donohue said. “The Chamber’s business members large and small engage in long-term planning that relies on assumptions about the economic foundation of our country. Passage of a strong highway and public transportation authorization proposal with bipartisan support will help to set the table on which these companies and their employees conduct business.”

Transportation Secretary Ray LaHood is asking Congress to complete a six-year transportation bill before the August recess. The last bill expired in September 2009 and has been continued under short-term extensions.

The White House’s fiscal 2012 budget request provides an outline for an aggressive $556 billion infrastructure plan that would funnel $50 billion this year into transportation projects and $8 billion into high-speed rail.

So far, the administration is leaving the decisions on how to pay for the plan to Congress.

Trumka rolled out a list of possible funding solutions, including imposing a user fee for drivers based on vehicle miles traveled, reauthorizing the Build American Bond program, implementing a financial speculation transaction fee on Wall Street and convincing the Federal Reserve to buy infrastructure bonds.

“We believe everything should be on the table when looking at funding source, utilizing innovative ideas as well as beefing up revenue streams that currently fund the system,” Trumka said.

“All of these ideas would help,” he added. “But they alone will not generate the robust levels of funding needed for us to stay competitive in the global economy.”

Donohue said any long-term bill must improve safety, reduce congestion, maximize the use of existing assets, improve urban mobility and ensure rural connectivity for small communities to support major economic population centers, Donohue said.

“We have outlined the wide gap between what is needed to fund a modern system and what the U.S. is actually investing,” Donohue said.

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Trumka and Donohue said they would soon be sitting down soon to discuss another issue, U.S. manufacturing, which they view as intrinsically tied to infrastructure spending.

“Investing in infrastructure projects will also boost our manufacturing sector,” Trumka said. “These projects create substantial long-term employment in manufacturing, design and engineering when we use the domestic U.S. supply chain to produce the materials that will be needed — from concrete, wire, steel and pipes to high-speed trains.”

If Congress can get past short-term extensions of the transportation bill, that will be a signal that would spur more private investment, Donohue said.

“We have simply coasted through the past several decades, and this neglect will require a herculean effort to restore our competitiveness in the world,” Trumka said.

The House Transportation and Infrastructure Committee is expected on Wednesday to approve another short-term extension of current surface transportation through the end of the fiscal year, which ends Sept. 30.