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Labor, Business Leaders Call for Raising Gas Tax

Labor, Business Leaders Call for Raising Gas Tax

Top executives of the nation's largest business organization and a large labor union joined hands Wednesday to urge senators to increase the federal gasoline and diesel taxes to provide greater funding for transportation projects in America.

During a meeting of the Senate Environment and Public Works Committee, U.S. Chamber of Commerce President & CEO Thomas Donohue and AFL-CIO President Richard Trumka joked about their unlikely partnership but said both business and labor interests want Congress to find a way to provide long-term funding for the nation's highways, bridges, railways, and ports.

"The U.S. Chamber of Commerce and the AFL-CIO don't always agree, so Mr. Donohue and Mr. Trumka's willingness to stand together in support of a strong surface transportation bill is a powerful signal," Senate EPW Committee Chairwoman Barbara Boxer said in her opening statement. "And just like they set aside their differences, I believe we in Congress -- Democrats and Republicans -- must roll up our sleeves and get to work on a bipartisan bill."

Donohue and Trumka said there needs to be an "appropriate" increase in the federal fuel tax, The Hill reported.

"The gas tax has not been raised since 1993," Trumka said. "It provides diminishing levels of funding and should be raised."

Added Donohue, "Seventeen years is a long time" to go without an increase.

The federal gasoline tax is 18.4 cents a gallon; the federal diesel tax is 24.4 cents per gallon. The user fees are not indexed to inflation, so the revenue generated produces diminished purchasing power every year.

"There needs to be a vigorous dialogue on funding and financing, but first we have to agree on the direction we're going," Dohohue said. "Everyone needs to keep an open mind. I am well aware of the fiscal constraints facing this Congress and the nation. But we must avoid cutting off our nose to spite our face. Without proper investment and attention to our infrastructure, the United States' economic stability, potential for job growth, global competitiveness, and quality of life are all at risk."

Sen. Tom Carper, D-Delaware and a member of the panel, has suggested gradually increasing the fuel taxes to provide more cash for the Highway Trust Fund, which would enable states to help repair and improve the nation's infrastructure. The Obama administration has expressed opposition to an increase, however, and did not identify a revenue source for a $566 billion six-year surface transportation reauthorization proposal it outlined this week.

"There should be no further delay on a multiyear authorization of the federal highway and public transportation programs," Donohue said. "The chamber's business members large and small engage in long-term planning that relies on assumptions about the economic foundation of our country. Passage of a strong highway and public transportation authorization proposal with bipartisan support will help to set the table on which these companies and their employees conduct business."

The last multiyear transportation authorization expired in September 2009 and has been continued under six short-term extensions, the latest of which expires March 4. The House Transportation and Infrastructure Committee approved a bill this week to extend the old authorization through Sept. 30 -- which would be two years since the last one was originally slated to expire.

Trumka said increasing fuel taxes must be considered along with other revenue raisers such as imposing a user fee for drivers based on vehicle miles traveled, reauthorizing the Build American Bonds program, implementing a financial speculation transaction fee, and convincing the Federal Reserve to buy infrastructure bonds.

"We believe everything should be on the table when looking at funding source, utilizing innovative ideas as well as beefing up revenue streams that currently fund the system," he said.

Statements from this hearing as well as an archived video are available at bit.ly/SEPWC021611.

The Senate EPW Committee will join the House Transportation and Infrastructure Committee on Wednesday, Feb. 23, for a hearing in Los Angeles on transportation needs and proposals to get the economy back on track through infrastructure investment.

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