Talks between the White House and Congress to avoid Dec. 31’s “fiscal cliff,” when some tax cuts expire and automatic spending reductions are set to kick in, won’t have transportation as a main focus. Yet the last two gasoline-tax increases, in 1990 and 1993, only happened because of deficit- reduction deals, said Mort Downey, a former deputy transportation secretary who’s a senior adviser at Parsons Brinckerhoff.
“They have a considerable opportunity to make a mark on transportation,” Downey said. “If they are serious about wanting to do something, it’s an environment in which it’s easier.”
It is an unclear whether LaHood will stay on to lead the effort. During the past year, the former Republican congressman has suggested that he’d be open to staying if asked by Obama, a Democrat and fellow Illinois resident. LaHood also has said he may leave.
Congress and the Obama administration in June reached a two-year deal on roads and transit. Instead of raising the U.S. gasoline tax, the largest source of revenue for road, bridge and transit spending, the legislation used $18.8 billion in general taxpayer money, on top of fuel taxes, to keep spending at current levels — about $52 billion a year — through fiscal 2014.
Obama spent part of this year’s presidential campaign talking about the need to do “nation-building here at home” after spending years and billions of dollars on the wars in Iraq and Afghanistan. Last year, he proposed a six-year, $556 billion transportation plan.
The president hasn’t specified ways to pay for the plan. LaHood killed a 2009 proposal by Minnesota Democrat James Oberstar, then chairman of the House transportation committee, to raise the 18.4 cents-a-gallon federal gasoline tax, which has been the main source for highway, bridge and transit expansions since Ronald Reagan’s presidency.
Then LaHood was “blown out of the water” by then-White House press secretary Robert Gibbs for suggesting a willingness to consider a tax based on the number of miles driven instead of the amount of fuel purchased, said Emil Frankel, visiting scholar with the Bipartisan Policy Center, a Washington-based research group.
“The president will try to find some sort of funding to finance some increase in investment,” Frankel said. “I don’t see any indication the president is prepared to propose a federal gas-tax increase.”
The White House left it to Congress to work out most of the details on this year’s transportation law, known as Moving Ahead for Progress for the 21st Century, or MAP-21. Congress left long-term financing issues unresolved, meaning the $18.8 billion shortfall in that two-year plan will probably get bigger as the economy lags and fuel sales fall, with vehicles getting more efficient.