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On Gas Tax Increase, Obama Is Wrong — And (Some) Republicans Are Right

It doesn’t happen often, but Washington is now debating an important issue on which the United States Chamber of Commerce, Senator James Inhofe (R-OK), Fox News pundit Charles Krauthammer, and a growing posse of assorted right-wingers are right – and President Barack Obama is wrong.

Those voices on the right, along with many on the left, are urging consideration of an increase in the federal gasoline tax, sorely needed both to maintain America’s transportation infrastructure and to reduce greenhouse gases. Yet for reasons best known to him alone, the president is resisting that excellent idea.

As every sentient American adult knows, the price of gasoline at the pump has fallen precipitously in recent months. Filling a 20-gallon tank today costs about $30 less than buying the same volume of gas cost last summer. To raise the federal gas tax by 15 cents per gallon would only recoup 10 percent of that consumer bonanza – and would bring tax revenues roughly in line with inflation since the last time an increase passed in 1993.

Since then, of course, America’s roads, bridges, tunnels, and transit systems have continued to decay, without sufficient funding or will to keep them in decent condition. Congressional revulsion at raising taxes, thanks to the mania enforced by Grover Norquist at the misnamed Americans for Tax Reform, has left the Highway Trust Fund on the brink of bankruptcy since last year. A modest gas tax increase would begin to solve the problem, at least for the transportation sector. (The rest of the nation’s infrastructure – everything from airports and dams to state universities, public buildings, and water mains – is falling apart, too, but that will require bigger solutions.)

Were we inclined, as a nation, to consider what we owe both our ancestors and our descendants, Washington would have embarked on a program of national reconstruction years ago, to take advantage of negligible interest rates, an idled labor force, and under-utilized capital. No comparable opportunity to rebuild cheaply and efficiently, while creating the kinds of jobs that support families, has existed since the Great Depression. And much of what we now take (and use) for granted was built in those years, and in the early postwar decades, when public works were widely seen as a public good.

But the ideologues who now dominate our politics under the rubric of “conservative” are not in the business of conserving anything – not our natural resources, not our environment, and certainly not our infrastructure. Their frothing opposition to government and taxation has actively encouraged decay. Today, the radicals represented by the Tea Party and Americans for Prosperity (another misnomer) will seek to block even a very modest gas tax increase, as they are doing on the state level in Iowa – without any plausible proposal for infrastructure repair that everyone knows is essential.

Ask for their alternative solution to financing infrastructure, and the geniuses at the Heritage Foundation, for instance, demand an end to transit spending and a cut in construction wages. Others on the right simply mumble about “reducing waste.” What they don’t propose is a plausible, equitable, sustainable way to rebuild.

These people shouldn’t call themselves the Tea Party. With their strange urge to ruin the transportation systems that made this the strongest country in the world, they’re more like a Termite Party. Termite is also the proper term for Republicans in the House of Representatives, where Speaker John Boehner brags that he has never, ever voted to increase the gas tax. (After all, it doesn’t fund golf courses or tanning beds.)

The limits to such madness may be on the horizon, however. When a right-wing stalwart like Inhofe – a noted climate denier and stooge of the oil industry – acknowledges that a gas tax increase may be inevitable, then sanity could break out, even on Capitol Hill.

For President Obama to situate himself among irrational opponents of an increase is perplexing. Perhaps if enough Republicans and corporate leaders insist on a gas tax hike, he will abandon that position and join their ranks. And then at last, the “bipartisan” approach he still cherishes, against so much evidence, might produce something of value to this country.

Tea Party Gas Tax Fix Is Bad Economics, Worse History

Aug. 23 (Bloomberg) — If the debt-ceiling showdown made your blood boil, if the shutdown of air-traffic-control work related to the airline-ticket tax drove you crazy, then you should unplug your TV and power down your computer in late September, as the deadline for extension of the federal gasoline tax draws near.

Because while President Barack Obama and most experts are pushing for a greater federal investment in roads and infrastructure to create jobs and strengthen our economy, a growing minority in Washington wants to end the federal gas tax and phase out funding for new construction under the federal roads program. That’s right: A sizable chunk of Republicans, led by Senator Tom Coburn of Oklahoma and Representative Jeff Flake of Arizona, want to abolish the tax that pays for the federal highway program and replace the whole system with one overseen by individual states.

This insurgency, inspired by the Tea Party, reflects flawed thinking on economics, transportation policy and even American history.

Like many other excise taxes, the federal highway tax comes up for periodic renewal, which is usually noncontroversial. But not this time. If Congress doesn’t act to renew the tax by Sept. 30, gas stations all over the country have to stop collecting it; the highway trust fund will never get the money; and new work on federal highway projects will come screeching to a halt.

Costs and Layoffs

A delay of just 10 days in renewing the tax would mean the permanent loss of $1 billion in highway funding (and layoffs for thousands of workers). Longer delays would measurably increase the national unemployment rate.

Although the gravest threat to renewal of the tax was removed last week, when anti-tax czar Grover Norquist ended weeks of uncertainty and dropped his opposition to a short-term extension, Tea Partiers and their allies on this issue haven’t given up the fight over ending the tax; if they can’t abolish it outright just yet, they’ll push to allow states to opt out.

Incredibly, the system of highway financing championed by Republican President Dwight D. Eisenhower six decades ago is a target for today’s Tea Party-influenced Republicans.

The economic impact of this radical position would be disastrous. Although it’s true, as I’ve written, that federal road programs create fewer jobs-per-dollar than they did generations ago (due to better equipment and technology), hundreds of thousands of Americans still draw paychecks working on such projects — and their paychecks help keep countless sandwich shops, dry cleaners, barbers and grocers in business. Cutting off this vital source of employment now, or at any time when unemployment is elevated, would be a grave self-inflicted wound.

Misguided Policy

As transportation policy, the notion of the states taking over federal highway work is even more misguided. We have a national road system because we have national transportation needs — to move people and goods from state to state, region to region.

States with many miles of highways and few people are likely to have less revenue to keep up these national roads and less interest in doing so, because many of the goods and visitors are just passing through on their way to someplace else. Trucks carrying goods from Chicago to Seattle, Atlanta to San Francisco and Philadelphia to Los Angeles travel through large, lightly populated Mountain West states that may be unable to finance a world-class highway system for such long-distance needs.

Just “letting the states do it” puts our national transportation system at risk. The idea is so misguided that calling it a Third World transportation system is unfair to the Third World: Developing countries are virtually all striving to build the sort of national infrastructure that the Tea Party wants to unwind in the U.S.

Misreading History

Which brings us to the historical misunderstanding behind this anti-national crusade. Highway funding is one issue among many where the Tea Party movement has its historical perspective upside down. Our Founders were not opponents of a national road system; they were its very creators.

The survey work for the first proposed national road was done by none other than George Washington. The early Congress funded a national road that traced a path similar to today’s Interstate 70, from Maryland to Indiana. Many veterans of the Revolutionary War, then serving in Congress, voted in favor of it. Even the anti-Federalist administration of Thomas Jefferson pushed the project; Albert Gallatin, Jefferson’s Treasury secretary, told the Senate: “No other single operation within the power of the government can more effectually tend to strengthen and perpetuate the Union.”

The highway-tax fight is a good moment for progressives to challenge the Tea Party — not just over economics and transportation policy, but also over what vision of America truly reflects the legacy of our Founders. Let’s not forget that the idea that brought those amazing men to Philadelphia in 1787 was to create a system of robust federal government and form a “more perfect union” — not just to leave the states to handle their needs on their own.

(Ron Klain, a former chief of staff to Vice President Joe Biden and senior adviser to President Barack Obama on the Recovery Act, is a Bloomberg View columnist. He is a senior executive with a private investment firm. The opinions expressed are his own.)

Copyright 2011 Bloomberg