Will the gas tax be the next DC showdown?
posted at 3:25 pm on August 10, 2011 by Jazz Shaw
Who’s ready for another endless fight across the aisle in Washington this fall?
In addition to the debt ceiling debate, we recently saw the FAA hit a temporary shutdown after Congress couldn’t agree on extending their marching orders. (They’ll be sending out apologies notes to all of you who got airline tickets for sixty dollars less any day now, I’m sure.) But the fun isn’t over yet, sports fans!
The Hill is reporting that the next target on the radar is the renewal of the highway bill – a behemoth package with hundreds of billions in spending and revenue buried in it. In case you missed that bit of secret code, the “revenue” portion includes the gas tax. You don’t suppose anyone currently serving in the legislative branch would turn that into a bone of contention to gnaw on, do you?
With the chambers far apart on their proposals for a long-term highway bill, and transportation advocates in Washington still reeling from the FAA fight, at least one Democratic aide in the Senate expressed concern that congressional Republicans would attempt to use the gas tax as leverage in the fight over the competing transportation proposals.
“There’s widespread support to maintain the current rate, and there has never been serious objection in the past,” the aide said. “But with [Rep. John] Mica’s [R-Fla.] recent actions on the FAA bill, who knows whether House Republicans will once again compromise jobs and the economy to make a political point?”
Mica is chairman of the House Transportation and Infrastructure Committee.
The bill that authorizes the gas tax to be collected, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) bill, is currently on its seventh short-term extension, which expires Sept. 30.
There are two very important aspects to the highway bill, which – much like it’s kissing cousin, the farm bill – is one of those unwieldy, expensive pieces of business-as-usual which normally sail on through the chambers. On the one hand, the purpose of the legislation falls under an area that even most conservatives agree is part of the federal government’s constitutional mandate: interstate commerce. It’s also a “pocketbook issue” which directly impacts a large number of blue collar jobs.
But on the other hand, we have entered the era of shrinking the government, cutting taxes and examining every penny of spending. If anyone is willing to take the time, there’s probably some substantial savings to be had there.
When the FAA authorization failed, travelers found themselves saving a fair amount of coin on their tickets. So how much would you put in your pocket if the government lost its authority to collect the federal gas tax? Perhaps not quite as much as you might think. The tax is currently 18.5 cents per gallon. The rest of the taxes and fees can be blamed on various state and local functionaries.
So, is this a hill worth dying on for fiscal conservatives? The total amount of spending we’re talking about really isn’t huge compared to things like entitlement programs. The Republicans are talking about a bill that spends $230 billion over six years. The Democrats are countering with a more expensive, shorter term plan costing us $109 billion over two years.
The revenue in question is significant. The current level brings in $100 million a day, and that adds up fast even in Washington terms. This should be a good open question for the commentariat. Do you want to fight this war in September?