We keep hearing that there are three areas of potential compromise between the new GOP Congressional majority and Democrats, President Obama included: Trade, tax reform, and infrastructure. The first appears real; the second less so.
But when it comes to the third — infrastructure spending — it would be nice if there actually were potential for agreement. Perhaps the most likely vehicle for a deal on infrastructure involves an agreement on long term funding of the Highway Trust Fund, via a hike in the gas tax.
Barring this, it’s hard to imagine the new Congress supporting any other kind of jobs-related spending.
So it’s unfortunate that House Speaker John Boehner, speaking to reporters today, dumped a few gallons of cold water on the idea of a gas tax hike:
“I’ve never voted to raise the gas tax. Funding a highway bill is critically important, it’s a priority for this year, how we’ll fund it we’re going to have to work our way through this. It’s doubtful that the votes are here to raise the gas tax.”
Asked for further clarification, Boehner spokesman Michael Steel emailed: “The Speaker doesn’t support a gas tax hike. Period.”
There appears to be a bit of disagreement among top Republicans on this. Three top committee chairmen — Senators John Thune, Jim Inhofe, and Orrin Hatch — have all refused to take the idea off the table. GOP Senator Bob Corker has already teamed up with Dem Chris Murphy to offer a gas-tax-hike proposal. However, Senate Majority Leader Mitch McConnell has said No to any gas tax increase.
The Highway Trust Fund — thanks to a short-term funding fix passed by Congress last year — will start to run dry this spring. It funds hundreds of transportation projects across the country. The Post has a good editorial spelling out the reasons why the right solution is raising the gas tax: Oil and gas prices are down, which theoretically should make the politics of this easier. The gas tax has been unchanged for two decades, and the value of the revenues it collects has plummeted due to inflation and developments in fuel efficiency. Long-term funding of the HTF would provide local planners the certainty they need to pursue big projects.
What’s more, a recent study found that Highway Trust Fund spending has a host of positive economic effects, from productivity enhancements to job creation. As the Post editorial put it, long-term HTF funding would amount to “a robust infrastructure policy that invests rationally in the economy.”
It’s true that Democrats, too, have been reluctant, for political reasons, to embrace a gas tax hike. But the other day, Dem Senate leader Dick Durbin came out for raising it. People who follow the gas tax debate closely believe this leaves little doubt that Democrats would ultimately support a hike (after all, they are big proponents of federal infrastructure spending). As Politico put it, “the real opposition lies in the GOP wings.”
Business groups want the GOP to act. Michael O’Brien, a spokesman for the Association of Equipment Manufacturers, emails: “Speaker Boehner, there’s a first time for everything, including doing the responsible thing, which is adjusting gas taxes to sustainably fund the Highway Trust Fund while oil prices are at record lows.”
But for now, it’s anything but clear that Republicans are willing to take this step. And as Paul Krugman wrote last summer, the last time such a decision loomed, the reluctance to raise the gas tax to fund the HTF mirrors a broader turn away from public investment in infrastructure at precisely the wrong economic moment:
It’s hard to think of any good reason why taxes on gasoline should be so low, and it’s easy to think of reasons, ranging from climate concerns to reducing dependence on the Middle East, why gas should cost more. So there’s a very strong case for raising the gas tax, even aside from the need to pay for road work.
But no…we can’t raise gas taxes because that would be a tax increase, and tax increases are even more evil than deficits. So our roads must be allowed to fall into disrepair.
If this sounds crazy, that’s because it is. But similar logic lies behind the overall plunge in public investment…everyone from progressive think tanks to the United States Chamber of Commerce thinks we need good roads. Yet the combination of anti-tax ideology and deficit hysteria (itself mostly whipped up in an attempt to bully President Obama into spending cuts) means that we’re letting our highways, and our future, erode away.
Also, it’s worth asking: If we can’t reach a deal to fund the HTF through higher gas taxes at this particular political moment, what possible deal can we reach that would involve new revenue for spending on infrastructure? It’s hard to imagine that there is one.