Should Republicans Fight Gas Tax Renewal?

It appears that our Federal $0.184/gallon gasoline excise tax is set to expire in just under 2 months, on September 30. This was news to me. As my colleague Doug blogs over at Outside the Beltway, this is being batted around as potentially being big news — brought to you by Grover Norquist & the Tea Party — over the interim:

You can already see how this issue could play itself out a month from now. As it is the issue of increased energy prices is an easy one to demagouge with simplistic slogans (“Drill Baby Drill”) and even more simplistic ideas (anyone remember when Hillary Clinton and John McCain came up with the idiotic idea of a Federal Gas Tax Holiday during the 2008 campaign?). It’s not at all hard to see the argument over the the gas tax being boiled down to the slogan Barack Obama wants to increase the price of gas. Given that renewing the gas tax is going to require affirmative action on the part of Congress (rather than legislation to block it) I’d already say that the forces that come out against it are going to have the advantage here, especially given the partisan make up of Congress and the difficulty of getting anything through the Senate.

There are, in fact, some remarkable similarities between the just concluded debt ceiling showdown and the showdown that could result over renewing the gas tax. Like increasing the debt ceiling, the renewal of the Federal Gasoline Tax has been a fairly non-controversial action in the past.

Republicans and Tea Party folks can advocate this on two grounds.

The first, of course, is Federalism. It is inefficient and counterproductive to route all these dollars through the earmark meat-grinder of Washington when states are more than capable of maintaining their own roads. Simply put, outside of direct Interstate Highway planning (which may have interstate commerce implications), the Federal government need not be involved in intrastate maintenance. For a party that has paid so much lip service to the earmark issue, this is a natural progression.

The second is mere populism. The national price of a gallon of gas on the day Barack Obama was inaugurated was $1.68. Today it is $3.70. That’s more than doubled since election day, and while it’s certainly easy to point out that there are a lot of reasons NOT related to the POTUS that drive gas prices, the “drill baby drill” crowd can clearly point to the moratorium on offshore drilling to suggest that POTUS is not only driving up gas prices, but then wants to keep taxing on top of them.

There’s only one problem: it’s not going to work. As Doug & the original article point out, the public does see tangible benefit in a purpose-driven tax such as this — they have roads to drive on. While libertarians and free-market types can point out all the ways that government provides roads inefficiently and performs crappy maintenance, the public doesn’t see stripping the funding as a way to fix that.

But that doesn’t mean it’s not worth a fight. Just as previous debt ceiling increases were provided “cleanly” but this one was driven through brinksmanship to force a $2T budget cut to make it happen, it is clear that the gas tax renewal can be tied to being a package deal with something that Republicans want.

The natural package deal is allowing expanded drilling (incl. places like ANWR). Push that along with an end to most “green energy” subsidies, and you have a fallback position of simply allowing the drilling that will please most of the Republican base, potentially drive down long-term gasoline costs, and does so in a way that otherwise simply gives us the status quo (the current tax rates). Or tie it to different taxes (keeping the Bush tax rates, or tax reform in another area such as repatriation of foreign earnings), although these options might be a political loser as the two issues are so separate.

But it would be a shame to simply let this slide without a fight. This is a tax that’s set to expire unless Congress actively extends it. This means that the burden is on Congress to bring an extension to the floor and pass it. Given Republican’s recent fight over the debt, ending a tax which doesn’t have a lot of inherent opposition may not be feasible. But that doesn’t mean it should be a clean bill.