President Trump tried Wednesday to persuade his fellow Republicans to raise the gas tax. In a closed-door meeting on infrastructure with members of both parties, Trump pitched the idea of a 25-cent increase in the gas tax, which hasn’t been raised since 1993. There’s a growing rift among Republicans about whether it’s worth considering a tax hike to fund much-needed upgrades to America’s roads and bridges.
“To my surprise, President Trump, today in our meeting, offered his support for raising the gas and diesel tax by 25 cents a gallon and dedicating that money to improve our roads, highways and bridges,” said Sen. Thomas R. Carper (D-Del.), who attended the meeting. Carper supports the increase and said “Trump came back to the idea of a 25-cent increase several times throughout the meeting.” The president “even offered to help provide the leadership necessary so that we can do something that has proven difficult in the past,” Carper said.
Republicans, who just passed major legislation to reduce taxes on businesses and families, are lukewarm on the idea of turning around and raising taxes at the pump. Last month, Sen. John Cornyn (R-Tex.) said he has “complete confidence” that the gas tax won’t go up. It’s currently 18.4 cents a gallon.
Sen. John Barrasso (R-Wyo.), chairman of a key Senate committee that is working on infrastructure, attended the meeting with Trump and reiterated that a gas-tax increase remains a nonstarter.
“I oppose raising the federal gas tax,” Barrasso said. “Not everyone who uses the roads today pays the tax, and not all of the money collected goes towards fixing America’s aging roads and bridges.”
But Republicans also don’t want to add anymore to the debt. Trump and the GOP-led Congress have passed a major tax cut and spending increase, putting the country on track to run $1 trillion deficits for years to come. There’s not much appetite to go into debt even more in order to fund infrastructure.
“First and foremost, infrastructure spending should be done in a fiscally responsible way and not add to the deficit,” Barrasso said.
That’s why Trump and some House Republicans, notably Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, have tried to revive the idea of a gas-tax increase. They got a major boost from the U.S. Chamber of Commerce, a powerful business lobbying group that gives millions of dollars to GOP candidates during election campaigns and that endorsed a 25-cent gas-tax hike.
The U.S. Chamber says the proposal would raise $394 billion, more than enough to pay for Trump’s $200 billion infrastructure plan and possibly even expand it further as many Democrats want. The increase could be phased in over the next five years by hiking the tax 5 cents each year.
At the GOP retreat in West Virginia, Shuster called the gas tax the “elephant in the room” and urged his colleagues to at least put it on the table for consideration.
But another key set of Republican donors, the Koch network, adamantly opposes any increase in the gas tax. More than 25 groups, mostly backed by the Koch brothers, sent a letter to Congress on Monday that said “raising the gas tax is a bad idea.”
“A higher gas tax means higher prices not just on gas, but on goods and services throughout the economy. These costs would inevitably be passed along to consumers in the form of higher prices, resulting a regressive tax hike on those who can least afford it,” wrote Brent Gardner of Americans for Prosperity and the other signatories.
The U.S. Chamber counters that not addressing America’s infrastructure is costing businesses and families money.
“While the user fee increase I proposed would cost the average motorist about $9 a month, our badly deteriorating roads are causing approximately $40 a month in increased maintenance and operating costs,” Thomas Donohue, president of the U.S. Chamber, said last month. He also noted that the typical American commute time increased 35 minutes between 1990 and 2015.
Trump initially pitched a 50-cent increase in the gas tax to lawmakers at the end of last year. Transportation Secretary Elaine Chao said this week that raising the gas tax is “not ideal,” but “everything is on the table.”