House Dem files bill to create oil 'barrel tax'

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Rep. Peter DeFazio (D-Ore.) is introducing a bill for a per-barrel tax on oil companies to fund federal transportation projects instead of having drivers pay at the pump. 

DeFazio said the measure, known as the Repeal and Rebuild Act, would generate enough money to pay for a six-year, $324 billion transportation bill by eliminating the current 18.4-cents-per-gallon fuel tax in lieu of a $6.75 per-barrel levy on oil sales. 

DeFazio said the measure would solve the current transportation funding crisis that has gripped Washington as lawmakers struggle to avert a projected bankruptcy in the Department of Transportation’s Highway Trust Fund. 

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“America’s economic competitiveness is at stake. While Congress hems and haws over how to deal with the dwindling Highway Trust Fund, the rest of the world is moving full-speed ahead,” DeFazio said in a statement.

“I introduced a real proposal today because I’m tired of Congress being all talk and no action. It seems like every politician says creating jobs is their priority,” he continued. “Here’s a chance for members to do just that by investing in our nation’s infrastructure. Let’s get this done.”

Lawmakers must find a way to close a shortfall in transportation funding that is estimated to be as high as $15 billion before the Department of Transportation runs out of money for its Highway Trust Fund, which could happen in August without congressional action. 

The traditional source for transportation funding is revenue that is collected by the federal gas tax, which has been stagnant since 1993 and was not indexed to inflation. The tax only brings in about $34 billion per year, however, and the current level of transportation spending infrastructure advocates want lawmakers to maintain is about $50 billion annually.

Democrats in the House had previously sponsored a bill that would have nearly doubled the gas tax to 33 cents per gallon, which supporters have said would be about the level it would be at if it had been indexed to inflation 21 years ago. 

The measure failed to gain traction because Republican leaders in the House and the Obama administration both object to raising taxes paid by drivers in the middle of an election year. 

At a rally for increased transportation funding in Washington on Wednesday, DeFazio said the state of American infrastructure was dire. 

“America is falling apart and we’re failing behind,” he said. “Most every other country in the world gets it. If you rebuild your infrastructure, or if you build a 21st Century infrastructure, you’re going to be able to compete in a global economy.” 

DeFazio said at the rally that his proposal to move to a barrel tax would give drivers in the U.S. a break at the pump and also provide more overall funding for transportation improvements. 

"I'm going repeal the retail gas tax at the pump ... and we're going to move the tax upstream to the oil companies and say 'you pay the tax and let's rebuild America,' " he said.  

DeFazio criticized a proposal from House Republican leaders to tie transportation funding to cut backs at the United States Postal Service, saying it would "destroy" the post office for a short-term infrastructure fix.   

"It's time to get the job done, no more hesitation around here," he said. "The trust fund runs out in August.

“I’m not hearing any real talk around here,” said DeFazio. “They're saying let's destroy the Postal Service to get six months' funding."  

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