After a month of fruitless talks between President Joe Biden and Senate Republicans, Republicans and Democrats are exploring a gas tax hike as part of a frantic last-ditch push to reach a bipartisan infrastructure package.
The bipartisan group is in the process of putting together a strategy that they believe would garner at least 60 votes in the Senate’s equally split chamber. Republicans and Democrats are evenly represented in the group.
Senators Mitt Romney of Utah and Rob Portman of Ohio are Republicans, while Democratic Senators Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, and Jon Tester of Montana are Democrats. The group formed when Biden ended talks with West Virginia Senator Shelley Moore Capito, who had been the Republicans’ principal negotiator since April.
Romney told Insider on Thursday that the new working group was weighing indexing the gas tax to inflation. The $0.18 levy hasn’t been raised since 1993. “It keeps it at the same value that it has today,” the Utah Republican said.
Given Biden’s vow not to raise taxes for those earning less than $400,000., the White House previously stated that raising the gas tax was out of the question. It did not react to a request for comment right away.
However, the concept gained traction among Democrats when Illinois Senator Dick Durbin, the chamber’s second-ranking Democrat, stated that he believes it “ultimately needs to happen.”
“I look at it as a user fee. We pay taxes on gasoline because we want to drive our cars on safe roads,” Durbin told reporters.
Still, other Democrats in the group, like Tester, appeared noncommittal. “It’s not one of my favorite things, but we’ll see what the entire deal looks like,” he said in an interview. “I got to see it in the context of everything, see what stays in and drops out.”
Another Democrat in the group, Virginia Senator Mark Warner, declined to say if he backed it, indicating the delicate nature of the talks. “I genuinely think it’s preferable to keep the ingredients quiet until the cake is fully cooked,” he told Insider.
Indexing the gas tax to inflation, according to Seth Hanlon, a tax analyst and senior fellow at the left-leaning Center for American Progress, would raise between $30 billion and $35 billion over a decade.
“It would be borne by consumers,” Hanlon told Insider. “We could get roughly the same revenue by rolling back the 2017 corporate tax cut by a fraction of a percentage point.”
He added that indexing the gas tax could have “modestly positive environmental effects,” but not if it’s paired only with spending focused on physical infrastructure and it omits climate.
Biden’s two-part economic plan includes $4 trillion in new spending on roads and bridges, as well as caregiving, cash payments, universal pre-K, community college, and a range of other initiatives.
Both parties are at odds over the extent of an infrastructure bill and how it will be paid for. Other Republicans are increasingly indicating that climate-related features would not be included in their bill.
Biden and congressional Democrats are pressing for clean-energy tax credits, a national network of electric car charging stations, and federal subsidies to convert houses.
“If they’re looking for a line item that says ‘climate,’ they’re not going to see that,” Sen. Lisa Murkowski of Alaska said of Democrats.
In recent days, a few Senate Democrats have increased their opposition of the bipartisan negotiations, claiming that such conversations risk excluding climate-related measures in an infrastructure package. Another prominent Democrat vowed to abstain from voting if climate change was not adequately addressed.
“On a big infrastructure bill, to pass on climate altogether? No way,” Sen. Ron Wyden of Oregon, the chairman of the Senate Finance Committee, told Insider. “Think I’m blunt enough? No way.”