U.S. Chamber of Commerce Chief Calls for Federal Gas Tax Hike

Organization has endorsed legislation that would add 15 cents a gallon over three years

Thomas Donohue U.S. Chamber of Commerce

Thomas Donohue

WASHINGTON -- Raising the federal gasoline tax above 18.4 cents a gallon is the "simplest and most straightforward" way to fund a long-term highway bill, Thomas Donohue, the president and CEO of the U.S. Chamber of Commerce, the nation's largest lobbying group for businesses, told Congress.

Lawmakers need to embrace a higher gas tax despite the backlash over a similar proposal two years ago that prevented approval of a six-year highway funding bill, he said.

The organization has endorsed legislation that would boost the tax by 15 cents a gallon over three years, said a Bloomberg report.

"For once, let's do what's right, not what's politically expedient," Donohue told members of the Senate Environment & Public Works Committee at a hearing in Washington.

Click here to read his prepared testimony.

A lack of consensus on how to continue funding about $50 billion-a-year in highway, bridge and mass transit projects beyond Sept. 30 led the Congressional Budget Office (CBO) to warn that the federal government may have to delay some payments to states before the fiscal year ends, said the report.

Committee Chairman Barbara Boxer (D-Calif.), who has proposed replacing the gas tax with a levy paid on oil at refineries, said she will advance highway legislation in April, though it won't address funding.

"I'm hoping for a five- or six-year bill," Boxer said.

Boxer said she will look to the Senate Finance Committee to decide how to fund the legislation.

Click here to view her prepared remarks.

The Highway Trust Fund, which pays for road and transit projects, is projected to have a shortfall of about $13 billion for fiscal 2015, the CBO said last week. Business groups have said infrastructure spending is needed to boost U.S. economic growth, while benefiting construction companies.

House Transportation & Infrastructure Chairman Bill Shuster (R-Pa.) said last week that he doesn't think there is enough support in Congress to raise the gas tax, and he suggested that spending cuts or revenues from oil and gas exploration on federal lands to fund projects. He also discussed the possibility of user fees to fund future highway construction that could include a vehicle mileage tax.

"I just don't believe … there's a will out there in the American public or in Congress," he said when asked whether the gas tax should be raised at a Bloomberg Government Infrastructure event. "Even our president has said, you know that we're not going to do that."

Boxer has said a higher levy paid on oil at refineries, which has been floated by research groups including Rand Corp. and the Carnegie Endowment for International Peace, could generate enough revenue to fund highways and mass transit for six years.

Click here to view a video of the full hearing.