Obama Administration Restates Opposition to Gas Tax Increase
March 24, 2010

Contact:

Matt Dempsey Matt_Dempsey@epw.senate.gov (202) 224-9797

David Lungren David_Lungren@epw.senate.gov (202) 224-5642

Obama Administration Restates Opposition to Gas Tax Increase

Inhofe: "I appreciate the Obama administration for taking a clear stand opposing any such increase."

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Washington, D.C.During a Senate Committee on Environment and Public Works hearing today, the Obama Administration restated its opposition to a gas tax increase.

U.S. Senator James Inhofe (R-Okla.), Ranking Member of the EPW Committee, asked Deputy Secretary of Transportation John Porcari if the Obama Administration remained opposed to a gas tax increase, including one tied to a cap-and-trade program. Porcari said, "That is still...the  position, and I would add, Senator, as we are in the beginning stages of a recovery it is as important as ever to make sure that that recovery is accelerated in every way possible." 

The Administration's opposition shows that the so-called "linked fee"which is a gas taxthe level of which is tied to the price of tradable allowances in a cap-and-trade program, lacks the support needed to pass as part of global warming legislation. To be sure, as gas prices approach $3.00 a gallon, and potentially climb higher in the summer driving season, consumers will have little appetite for paying more at the pump. 

"Today, as the American public continues to face high unemployment, imposing a gas tax increase on consumers, including families, farmers, truckers, and drivers in rural areas, would destroy jobs and create additional economic pain," Senator Inhofe said. "I appreciate the Obama administration for taking a clear stand opposing any such increase.  Such clarity can help focus Congress on developing bipartisan solutions to strengthen energy security through greater domestic production and encouraging the commercialization of new technologies, such as natural gas vehicles.  These solutions will help consumers facing high gasoline prices and will lessen our dependence on foreign energy." 

Transcript from today's hearing:

Sen. Inhofe: First of all, I think there is an area where we all agree, I know the Chairman and I do, and I think also from the information that we've got from Secretary LaHood that he does, and that isthey were talking about in this proposed bill that we still haven't seen and may never surface, the Kerry-Graham-Lieberman billthey talk about the linked fee, and what they're talking about is an increased gas tax. We've had conversations amongst ourselves up here and of course hearings with Secretary LaHood.  And the statement he had made was, "With these hard economic times, President Obama, and the Administration, does not believe that raising the gas tax is good for Americans who are out of work and can least afford the gas tax being raised.  We will stand by that."  I would ask that if you agree, if that is still a good statement and the position of the President?

Deputy Secretary of Transportation John D. Porcari: "That is still...the  position, and I would add, Senator, as we are in the beginning stages of a recovery it is as important as ever to make sure that that recovery is accelerated in every way possible." 

Background:

During an EPW Committee hearing last July, Senator Inhofe raised the question about the Obama administration's position on increasing the gas tax as well. Secretary LaHood dismissed increasing the gas tax, as did Senator Boxer.

Transcript from July 14, 2009 EPW Hearing

Senator Inhofe.  It is a tough problem though. We understand that.  Secretary LaHood, you and President have been very adamant that we should not increase Federal gas taxes.  Frankly, I agree with you.  During this turndown, by design a cap-and-trade scheme will increase the cost of energy, including gasoline.  The Union of Concerned Scientists estimates that it will translate to 20 cents per gallon, which is about double our current tax.  Others have looked at it, like the EIA and I think CRA and said it is going to be more than that. Now, either way, do you see a contradiction here in that while you and I both agree we should not be increasing gas tax, his would have the effect of increasing the cost of that energy by an amount about equal to what our gas tax is today?

Secretary Ray LaHood.  Well, Senator, I will say what I have said on a couple of different occasions at this Committee and also at other committees, both in the House and Senate.  With these hard economic times, President Obama and his Administration does not believe that raising the gasoline tax is good for Americans who are out of work and can least afford to have gasoline raised. We will stand by that.  We are going to work with Congress on other alternatives to help with the Trust Fund, which is obviously inadequate, we know that it is, and we have suggested some other funding ideas.  But we are not for raising the gas tax.

Senator Inhofe.  Yes, but if you are not for raising the gas tax, which I agree with you, and you stated that it would impose a cost on people during a economic downturn, would not this same increase cost per gallon of gas due to the increase costs of energy under cap-and-trade, if that were the case, impose the same hardship on these people?

Secretary LaHood.  Well, Senator, I have not really looked at that the way that you have.  I have not analyzed it the way that you have.  But I, you know, as the Senate moves ahead with its bill, I am certain that the Administration will have to weigh in on these matters. Senator Inhofe.  All right.  Thank you.

...

Senator Boxer Statement Opposing Gas Tax at July EPW Hearing

Senator Boxer.  Okay.  We are going to move on to the next panel. I just want to say, before Secretary LaHood, you leave, and the Assistant Administrator, we are going to have this debate on Thursday because I am going to propose, I am sorry, tomorrow, I am going to propose an 18-month clean extension.  Just before you leave, I wanted to make two points. First of all, because I know Senator Inhofe is right, this is not the place and time to debate Waxman-Markey, but unfortunately that is what some of my colleagues started to attack.  The record has to show there is not any tax increase in Waxman-Markey.  There is a tax credit to defray any increase in costs, and the modeling shows a two cent per gallon increase in gasoline over each year. I wanted to also point out that, under the Oberstar Bill over in the House, it would take a doubling of the gas tax, which I do not support.  I identify with the President on that point. I am willing to look at an indexing to inflation of the gas tax, which I have publicly said, but I think we do have to look at these many other ways to pay go.

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