The Next Capitol Hill Battle: The Gas Tax
Politico looks ahead to what is likely to be the next big showdown on Capitol Hill when Congress returns for the summer recess, the fact that most of the Federal Taxes on gasoline are set to expire on September 30th:
In normal times, renewing the federal excise tax on gasoline would be another routine vote in Congress.
But as the past month of rancorous and intensely partisan debate about raising the debt ceiling has shown, the times are anything but normal.
And with most of the 18.4-cent tax per gallon of gasoline set to expire Sept. 30, renewing the tax could be the next political controversy to spark a brawl in an ever more deeply divided Capitol Hill.
Congress has already come to the brink of a government shutdown and is only now wrapping up an eleventh-hour compromise to save the country from a first-ever default. A legislative dispute has even temporarily shuttered the Federal Aviation Administration. With the level of partisan vitriol and anti-spending sentiment at an all-time high, some advocates are worried that the nation’s highway fund will be the next victim — while some conservatives sense an opportunity.
“The White House is going to make a move to renew it. We’ll see — but there will be Republicans who will be resistant to that.” said Doug Heye, former spokesman for the Republican National Committee.
Gas prices, said Heye, are “really affecting families. If you have to drive 20 miles to work every day, those are real costs.”
Already, a handful of conservative groups are eyeing the expiration as the next potential front in the spending and tax fight — including Grover Norquist’s influential Americans for Tax Reform group — but are mum about any potential legislative strategy.
“In general, ATR has always supported the idea of ending the federal tax on gas and having states pay for their own roads,” Norquist told POLITICO, but he declined to say whether he or his group plans to pressure congressional Republicans to let the excise tax expire.
“ATR would love to help begin such a dialogue,” he said.
“We’re monitoring the situation. I think that everyone on the Hill and most outside groups are pretty focused on the nation’s debt crisis,” said Barney Keller, spokesman for the conservative Club For Growth, who also wouldn’t say whether his group wants the tax to expire.
You can already see how this issue could play itself out a month from now. As it is the issue of increased energy prices is an easy one to demagouge with simplistic slogans (“Drill Baby Drill”) and even more simplistic ideas (anyone remember when Hillary Clinton and John McCain came up with the idiotic idea of a Federal Gas Tax Holiday during the 2008 campaign?). It’s not at all hard to see the argument over the the gas tax being boiled down to the slogan Barack Obama wants to increase the price of gas. Given that renewing the gas tax is going to require affirmative action on the part of Congress (rather than legislation to block it) I’d already say that the forces that come out against it are going to have the advantage here, especially given the partisan make up of Congress and the difficulty of getting anything through the Senate.
There are, in fact, some remarkable similarities between the just concluded debt ceiling showdown and the showdown that could result over
increasing renewing the gas tax. Like increasing the debt ceiling, the renewal of the Federal Gasoline Tax has been a fairly non-controversial action in the past. Ronald Reagan did it in 1982, George H.W. Bush did it in 1990, Bill Clinton did it in 1993, and George W. Bush and a Republican Congress did it in 2005. Additionally, attempts to roll back the tax in the past have generally failed.
The main reason for that is that the gas tax is one of the few federal taxes that is specially designated for only one purpose:
The federal Highway Trust Fund — the largest source of cash for mass transit and road improvements — is funded by the tax on fuel. In 2008, when high gas prices kept consumers away from the pump, the fund temporarily ran out of money, forcing Congress to appropriate an additional $8 billion to keep road projects on track.
Now, with many states facing budget shortfalls and cutbacks, it’s unclear whether states could assume a larger role in maintaining their highways. Experts say that an expiration of the gas tax would throw the nation’s transportation system into chaos.
“It’s the most important transportation funding source we have,” said Carl Davis, an analyst with the group Citizens for Tax Justice. “It would be absolutely devastating to that trust fund.”
More policy-oriented conservative groups — even libertarian scholars — believe that the tax must ultimately be renewed.
“I have every expectation that will happen this time,” the conservative Heritage Foundation’s Ronald Utt said on renewing the tax. “If nobody has a bill to replace it, then they’ll have to.”
“It’s no question that it should not expire,” said Robert Poole, a transportation policy expert with the libertarian Reason Foundation. “There’s certainly good grounds for rethinking the federal role as it has evolved,” he told POLITICO. But “if it were to suddenly go away, it would be chaotic.”
Of course, this is just the kind of logical, fact-based argument that many in the Tea Party movement refused to accept with regard to the debt ceiling. In that case, they simply refused to believe that letting the Federal Government get to the point where it didn’t have enough money to pay its bills would be a big deal. Is it really that hard to believe that they’d worry much about bankrupting the Highway Trust Fund? Given the comments from groups like Heritage and Reason, and given the fact that transportation funding is an issue that hits home in nearly every Congressional District, its possible that this won’t be an issue that the GOP as a whole won’t push too hard on.
7Of course, the gas tax won’t be the only battle that Congress will be fighting when it returns on September 7th. The Federal Budget for Fiscal Year 2012 has to be approved by September 30th, and the battles are already shaping up over the membership and purview of the so-called “Supercommittee” formed by the debt ceiling deal.Then, after the supercommittee submits its report in November, Congress will have a month to debate the package it presents and either approve it, or allow the across the board cuts set forth in the deal to go forward. Then, the 2012 election cycle starts.
In other words, if you thought the past two months were the worst of it, you haven’t seen anything yet.