The U.S. Chamber of Commerce unveiled its 2013 policy agenda Thursday, calling for an increase in the federal gas tax at a time when some governors and industry experts contend it’s futile to pursue that goal.
Chamber President and Chief Executive Officer Tom Donohue said there is no question that infrastructure investment has to be ramped up following the partial success of the two-year transportation bill enacted in 2012.
The federal gas tax, which backs Garvee, or grant anticipation revenue vehicle, bonds with distributions from the imperiled highway trust, has not been raised nor indexed to inflation in two decades.
“I really believe you can’t grow an economy in a significant way without a supply line, without infrastructure,” Donohue said. “We’re going to need more money for it .... We’re going to have to take a look at the federal fuel tax.”
Donohue expressed skepticism at the plan unveiled earlier this week by Virginia Gov. Bob McDonnell, under which the commonwealth would eliminate its own state gas tax and dedicate a portion of increased general sales taxes to transportation. Donohue said the actual users of the roads should drive the revenue.
“It ought to be paid for by the users,” he said.
Donohue said the gas tax is not strictly a tax, but is really more of a user fee. Even a small increase would greatly strengthen the position of federal infrastructure investment, he added.
“People get a little squishy when they think its a tax,” he said. “We don’t need a lot.”
Although most transportation lobbyists and experts agree a gas tax increase would benefit U.S. infrastructure, they continue to view it as politically problematic.
A finance expert at the American Association of State Highway and Transportation Officials said last month that a gas tax increase was possible, but “tough.”
The existing transportation bill keeps the highway trust fund solvent for another two years with transfers from the U.S. general fund, but uncertainty over the future of federal policy earned Garvee downgrades or revised outlooks for billions of dollars of bonds from the major rating agencies.
A Wells Fargo report earlier this week said Garvees are strong and possibly being undervalued by Moody’s Investors Service, but still urged investors to look for Garvees that are not entirely reliant on federal revenue streams.
The chamber will also spend the new year beefing up its lobbying and legal teams to advance a pro-business agenda and combat regulatory overreaches, Donohue said.
Though he did not point out specific provisions of the law, Donohue indicated that the Dodd-Frank Act would be a focal point of chamber efforts.
“The Dodd-Frank financial reform law mandates 447 new rules, and regulators have only finalized a third of them,” he said.
“The chamber’s Center for Capital Markets will advance an agenda to make sure we preserve diverse sources of capital for our nation’s job creators,” he said. “We will promote additional reforms in areas where Congress has not yet acted.”
For anything at all to get done, though, lawmakers and the White House will have to adopt a much more cooperative stance then they have displayed in recent days, Donohue concluded.
“America needs big solutions so it’s time to put the smallness of politics aside,” he said. “We call upon America’s leaders in and out of government to put country first.”
