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Feb.09, 2015

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GOVERNMENT WATCH INTERNATIONAL | WASHINGTON | CUSTOMS | SECURITY | REGULATION 16 THE JOURNAL OF COMMERCE www.joc.com FEBRUARY 9.2015 By William B. Cassidy FOR YEARS, THE U.S. Chamber of Com- merce has urged Congress and the White House to raise the federal fuels tax to help maintain and expand aging highways and bridges. And for years, Congress and the White House have said no. It's time to try again, the head of the largest U.S. business lobbying group says. "We're asking for Congress to pass a long-term highway bill with full fund- ing," Thomas J. Donohue, president and CEO, said during his 2015 State of Ameri- can Business address on Jan. 14. "How to pay for these programs? The simplest and fairest way to do this is through a modest increase in the federal fuel user fee, which hasn't been increased in more than 20 years. I know the politics are difficult, but isn't this a pretty good time to try?" What makes this particular point in time so good is the sharp drop in fuel prices sparked by a significant drop in oil prices. The national U.S. average retail price for gasoline was $2.02 per gallon on Jan. 26, a level not seen since 2009 at the depths of the Great Recession. Prior to last November, the U.S. average gas price at the pump hadn't dropped below $3 per gallon since December 2010. When it fell to $2.96 on Nov. 3, service station own- ers were asked if they had to search their attics to find the number "2" for their price signs. The drop in per-gallon gas prices from $3.64 on average last June to $2.03 in late January is putting more than $1.50 per gal- lon back in consumer pockets. Donohue believes some of those savings should be used to shore up the highways those con - sumers travel. "Isn't it worth investing a dime or two of those savings back into our roads, high- ways and transit systems, to put Americans back to work?" he asked business leaders gathered at the U.S. Chamber's Washington headquarters for the annual speech on the business climate. Asked later whether he was advocating a 20-cent-per-gallon increase in the federal fuels tax, Donohue replied, "There was an 'or' between the first and second dime." The U.S. excise tax on fuel is 18.4 cents for gasoline and 24.4 cents for diesel, Those rates haven't changed since 1993. "Since then, everybody in this room has gone from having a car that gets x miles per gallon to a car that has many more miles per gal- lon," Donohue said. "We're driving more miles on the road, and col- lecting half the funds we need to repair the roads and extend them," he said. "What's needed is a realization that there are a lot of holes in the road, a lot of bridges that don't work, and pretty soon we're going to have a crisis." Speaking with Donohue at a press con- ference following the address, R. Bruce Josten, executive vice president for gov- ernment affairs at the U.S. Chamber, said federal Highway Trust Fund receipts from fuel taxes are down about 30 percent since 2007. "There are a lot of factors," he said, including more fuel-efficient cars and trucks and changing driving habits. "Millennials aren't driving as much as my generation." As for other means of raising highway funds — from tax reform to an infrastruc- ture bank — Donohue said most of them are simply ways to avoid discussing the gas tax. "You can't have an infrastructure bank until you have a core system that allows you to pay for it," he said. "My recommendation to the leadership (in Congress) is that this (raising the fuels tax) is a hell of a lot simpler than a lot of the things they're talking about." And Josten said some members of Con- gress are still talking, at least, about the federal fuels tax. "It's encouraging that today you have more members of the House and Senate saying maybe we ought to take a look at this," he told reporters. "You didn't even have those discussions a year ago, and that's a big improvement. This isn't going to be done for free." JOC Contact William B. Cassidy at wcassidy@joc.com and follow him on Twitter: @wbcassidy _joc. LET'S GO BACK TO THE PUMP The head of the U.S. Chamber of Commerce makes another case for raising the fuels tax "I know the politics are difficult, but isn't this a pretty good time to try?"

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