WASHINGTON — The political vision of a summer gas-tax holiday died a quick death in Congress, losing to a view that federal excise taxes on gasoline and diesel fuel will have to go up if they go anywhere.
Despite calls from the presidential campaign trail for a Memorial Day-to- Labor Day tax freeze, lawmakers quickly concluded — with a prod from the construction industry — that having $9 billion less to spend on highways could create a pre-election specter of thousands of lost jobs.
Now, lawmakers quietly are talking about raising fuel taxes by a dime from the current 18.4 cents a gallon on gasoline and 24.3 cents on diesel fuel.
With gas prices setting records daily, Republican presidential hopeful John McCain and former Democratic candidate Hillary Rodham Clinton called for a 90-day suspension of the federal fuel tax to give some relief at the pump. The fuel taxes go into the Highway Trust Fund, which is used for road construction and repair and mass transit.
Depriving the 52-year-old Highway Trust Fund of $9 billion at a time when it is heading into the red doomed the notion of a gas-tax holiday in Congress.
The chairman of the House Transportation and Infrastructure Committee, Rep. James Oberstar, and the chairman of the highway subcommittee, Rep. Peter DeFazio, presented fellow lawmakers with a list of how many jobs and how much money each state would lose.
It ranged from $30 million and 1,000 jobs in Vermont to $664 million and 23,000 jobs in California. In Colorado, losses would be $96 million and 3,351 jobs.
“Because the trust fund is already looking at a looming shortfall, it would have moved project cancellations into the construction season,” DeFazio, D-Ore., said in an interview.
Just three years ago, that trust fund enjoyed a surplus of $10 billion.
Even without a tax freeze, the fund is projected to finish 2009 with a deficit of $3 billion. That that could grow as Americans drive less and buy less gas because of higher pump prices.
The consequence is that only about $27 billion in federal money will be available next year to states and local governments for new infrastructure investment even though the current highway act calls for spending $41 billion a year. For many, the solution is to raise rather than suspend or cut federal fuel taxes, which haven’t changed since 1993.
The Transportation Construction Coalition, a group of industry companies and unions, said that if Congress does not do something about the shortfall, states will lose about one-third of their road and bridge money in the budget year starting Oct. 1. That would put 485,000 more jobs at risk.
Oberstar, D-Minn., said his committee is working on the next long-term highway bill.
He estimated it will take between $450 billion and $500 billion over six years to address safety and congestion issues with highways, bridges and transit systems.
