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

The lawmakers suggest 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 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 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 of $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 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 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.