How Does A Gas Tax Reduce The Deficit?

The deficit commission has proposed a 15-cent gas tax, which would fund the Highway Trust Fund for needed infrastructure projects as opposed to deficit reduction. Brooking's Robert Puentes explains why it was included.

Transportation policy wonks commiserate that the federal gas tax was last raised in 1993 - creating a huge shortfall in maintenance and inability to launch new projects. The National Commission on Fiscal Responsibility and Reform (known simply as the deficit commission) addressed a consequence of this funding lapse, as Puentes explained:

"Simply put, it's because the gas tax doesn't generate enough revenue to cover the costs of the federal transportation program. So on three separate occasions since September 2008 a total of $34.5 billion in general funds have been used to backfill the transportation account to keep it from running a negative balance. And this does not even include the general fund money that regularly funds some transit and safety programs, nor the $35.9 billion in general funds for highway and transit projects as part of the American Recovery and Reinvestment Act."

As was to be expected, none of the deficit medicine was to be swallowed, as Fox News reported on Dec. 3: "The report from the 18-member deficit commission won the support of 11 members, short of the 14 necessary to be formally adopted. The vote does not preclude Congress from taking up any of the dozens of recommendations on the floor, but it virtually assures the proposals will not be considered as a single package."

Thanks to The Transit Coalition

Full Story: Why a Gas Tax Is About Deficit Reduction

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