Stakeholders Told Cover Is Needed For Revenue Raisers
Peter Kohn | Congress Daily | July 7, 2009
You can find the original article here.
The chief architect of House Democrats' 2008 electoral gains recently had a blunt message for supporters of a multiyear surface transportation funding bill: Don't count on Democrats alone to fall on their swords for gasoline or other tax increases to pay for it.
Democratic Congressional Campaign Committee Chairman Chris Van Hollen of Maryland "laid out political reality" at a June 26 meeting with about 75 transportation lobbyists and stakeholders, sources familiar with the event said.
The message was that "unless groups like the U.S. Chamber of Commerce are willing to provide political cover so members know they are not going to get absolutely skewered ... there is no way we can talk about a revenue solution," according to one attendee. "Support is going to have to come from both the left and the right."
Van Hollen is also the assistant to House Speaker Pelosi and a member of the tax-writing Ways and Means Committee, which is entrusted with coming up with the money needed for transportation programs. He spoke at an event hosted by Rep. Earl Blumenauer, D-Ore., the latest in a series of off-the-record transportation discussions he's held with lawmakers, lobbyists, academics and others over the past year.
Van Hollen "was pleased to meet with several key transportation stakeholders and had a candid discussion about the significant infrastructure challenges we face," a spokeswoman said. "He urged them to get engaged and let their voices be heard on the issue."
Practically lost amid the climate and healthcare debate is the fact that surface transportation programs, facing a severe backlog and funding shortfall, expire Sept. 30. As much as $7 billion is needed just to get through the summer.
House Transportation and Infrastructure Chairman James Oberstar and Highways and Transit Subcommittee Chairman Peter DeFazio, D-Ore., introduced an ambitious $500 billion proposal, but that is not expected to become law this year.
The Obama administration would postpone the debate for 18 months, coupled with a $20 billion fix to tide the Highway Trust Fund over until March 2011.
CBO estimates about $140 billion in new revenues over six years is needed to meet Oberstar's target. The 18.4-cents-a-gallon federal gasoline tax hasn't been increased since 1993, and highway funding advocates argue raising the tax is among the easiest and most effective options, at least in the short term.
Others, such as Blumenauer and DeFazio, have proposed alternative financing approaches. DeFazio wants a tax on oil futures and options trades, while Blumenauer advocates a tax on each barrel of oil used in the United States; Blumenauer would also increase the gas tax temporarily while transitioning to longer-term "road-use" fees on miles traveled and studded snow tires, for example.
What is instructive about the debate is that the June 26 discussion coincided with a House floor vote later that day on climate change legislation. GOP critics lambasted the cap-and-trade regime as a "national energy tax" that would raise the cost of fuel, among other things.
That measure passed, 219-212, with eight Republicans providing the necessary cushion. One transportation lobbyist said the climate bill alone demonstrates that Transportation Secretary LaHood's contention that a gas tax increase is unacceptable during the recession is "almost laughable."
Nonetheless, veteran politicians like Van Hollen and Pelosi recognize the powerful impact of the tax argument on freshman Democrats and other vulnerable members, hence the frenetic climate bill lobbying effort. The emerging healthcare bill is likely to raise taxes as well.
Another vote to increase taxes this summer -- when gas prices are predicted to rise -- on a bill containing billions in earmarked funds could provide the GOP with a tailor-made talking point. On the other hand, waiting until next year risks running headlong into the midterm election cycle when it may be even tougher, observers say.
"It's always going to be difficult," a lobbyist said. "It would be difficult now, it would be difficult next year, and if we wait until 2011 like the administration wants, then Obama's going to be running for re-election."
Depending on the final product, Van Hollen, Oberstar and other top Democrats might in fact have an ally in the aforementioned Chamber of Commerce -- which has generally never met a tax increase it could support.
Earlier this year, Chamber President Thomas Donohue testified before Oberstar's panel that "the full weight of the Chamber will come behind an effort to increase user fees to provide the revenue our transportation infrastructure badly needs," with certain conditions. Those include "significant program reform," limiting earmarks and nontransportation spending, and new opportunities for private-sector involvement.
When that moment of truth arrives, however, remains anyone's guess.