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 — far from dropping — 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.

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.

That message carried the day this summer. But now Congress has the bigger task of dealing with the short-term deficit crisis in the fund and coming up with a new spending plan, including revisiting the gas tax issue, when the current six-year, $286 billion highway-transit act expires in September 2009.

My advice is to vote against ever single incumbent every election day until they are all gone. All of them. 9% approval rating? It will be 4% Monday if they run a poll after this one. You’re fired.

Posted by Drew458     on 07/19/2008 at 04:06 PM   
Filed Under: • Government •  
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