Congress

Schumer: Gas tax hike should be tied to 2017 tax cut rollback

Democrats seek a plan going beyond highways, tackling clean energy and making infrastructure resilient to climate change

Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles Schumer, D-N.Y., arrive for a new conference in the Capitol about a continuing resolution to re-open the government on January 25, 2019. (Tom Williams/CQ Roll Call file photo)

Updated 6:50 p.m. | Senate Minority Leader Charles E. Schumer wants President Donald Trump to consider rolling back parts of his signature 2017 tax cuts as a condition for advancing legislation to raise the federal fuel tax, according to a person close to the New York Democrat, a demand that will complicate efforts to pass a comprehensive infrastructure bill before the 2020 elections.

“Unless President Trump considers undoing some of the 2017 tax cuts for the wealthy,” the person said, “Schumer won’t even consider a proposal from the president to raise the gas tax, of which the poor and working people would bear the brunt.”

[Pelosi, Schumer head to the White House for infrastructure talks]

Later, in remarks on the Senate floor Monday afternoon, Schumer noted that “by reversing only the most egregious giveaways in President Trump’s tax bill — those given to the wealthiest of the wealthiest — and raising the corporate tax rate a smidge, we could finance the entirety of a trillion dollar infrastructure bill.”

Schumer stopped short of tying the tax cut rollback to an increase in the fuel tax.

The gas tax stipulation came a day before Schumer and Speaker Nancy Pelosi are expected to meet with Trump at the White House to chart a path for comprehensive legislation to fix, maintain and update the nation’s public works. Schumer’s demands could stymie chances for a deal with the president and his GOP backers in Congress who have touted the tax cuts signed into law December 2017 as one the administration’s signature achievements.

Democrats have criticized the tax overhaul law as a gift to corporations and the wealthy and warned it could hurt low income workers and lead to economic difficulty for the country later. 

A provision of the tax law cited by the person close to Schumer was the reduction of the corporate tax rate to 21 percent. The person, who declined to be identified discussing the lawmaker’s position, said Schumer wants that rate raised to 25 percent.

Senate Majority Leader Mitch McConnell, who could not immediately be reached for comment, is unlikely to bring up legislation to unwind those tax cuts.

Industry groups worried about the economic impact of further deterioration of U.S. highways, roads and bridges have endorsed raising the fuel tax for the first time since 1993 as a necessary step to prevent the insolvency of the Highway Trust Fund, which helps pay for transportation improvements.

‘Eliminate any chance’

The U.S. Chamber of Commerce has proposed partly paying for maintenance and improvements to the country’s transport systems by raising the federal fuel tax by 25 cents per gallon over five years, which it says would generate $394 billion in 10 years. The American Trucking Associations has also called for a 20-cent hike over four years, which would raise $340 billion in a decade.

A chamber spokesman Monday said “any attempt to pay for an infrastructure bill by rolling back tax reform is a non-starter for us and would eliminate any chance to enact a bipartisan infrastructure bill this year.”

Pelosi and Schumer earlier Monday also told the president in a letter that they want a “big and bold” public works package that goes well beyond highways to also tackle clean energy and make roads, bridges, water systems and coastlines more resilient to the impacts of climate change.

“To truly be a game changer for the American people, we should go beyond transportation and into broadband, water, energy, schools, housing and other initiatives,” the lawmakers said. “We must also invest in resiliency and risk mitigation of our current infrastructure to deal with climate change.”

[House Democrats get a spending jump on the Senate]

Fixing, maintaining and updating the nation’s distressed public works are a priority for Republicans, Democrats and the White House. But more than two years into Trump’s presidency, legislation that delivers on his campaign promise to spend at least $1 trillion on infrastructure remains elusive. 

Leverage

Trump has asked Congress for $200 billion over 10 years in his fiscal 2020 budget request, which the administration has asserted could attract $1 trillion in state and private sector spending. Lawmakers of both parties last year rejected a similar White House proposal because it would require states to put up a significant portion of the money.

Industry groups are hopeful for a deal soon, as lawmakers have signaled they want to complete a package by the August recess and as the 2020 campaigns draw closer.

Senate Environment and Public Works Chairman John Barrasso and his Democratic counterpart Thomas R. Carper told CQ Roll Call they’re collecting input from every senator on their infrastructure priorities. The lawmakers said in an email they aim to advance bipartisan legislation through the committee “this summer.”

Portland Cement Association President and CEO Michael Ireland called on the lawmakers and Trump to reach an agreement on “a robust solution” that includes an increase in the gas tax.

Speaking before Schumer’s position on the tax rollback was known, Ireland said he hoped the Tuesday meeting could help break “the chains of political inertia” on infrastructure spending.

“Everyone we have met with on Capitol Hill, Republicans and Democrats alike, wants to solve this problem. … What they also have in common is that they’re all afraid to go first,” Ireland said in a statement. “The truth is only the president can provide cover for his caucus. Likewise, only the speaker and the Senate minority leader can provide cover for their members.”

Pelosi and Schumer also asked Trump to consider a package that boosts labor protections, supports women, veteran and minority-owned businesses and encourages the use of domestically manufactured products in infrastructure projects.

“This bill can and should be a major jobs and ownership boost for the American people,” the letter said.

The White House declined to comment on Pelosi and Schumer’s proposals, including whether Trump would consider the reversal of the tax cuts.

Pelosi has said she wants an infrastructure package of up to $2 trillion, a figure that has been received with apprehension from some key Republicans who consider it too high and unrealistic.

Congress and state governments rejected Trump’s previous proposal to pour $200 billion into infrastructure with hopes it could spur up to $1 trillion in state and private sector spending. That plan was jeered because it would require states to raise a significant amount of money for public works spending.

Pelosi and Schumer on Monday said they wanted Trump to “be aware of” the priorities they will discuss.

“The issue of infrastructure is a bipartisan congressional priority and we believe there are significant majorities in both the House and Senate to take action on the issue,” the Democratic leaders wrote. “This bipartisanship is a reflection of the American people’s recognition of the need to rebuild our infrastructure to promote commerce, create jobs, advance public health with clean air and clean water, and make our transportation systems safer — indeed, to improve the quality of life of all Americans.”

The Democratic delegation to the White House will include Sens. Richard J. Durbin of Illinois, Patty Murray of Washington, Debbie Stabenow of Michigan, Oregon’s Ron Wyden and Carper.

 

 

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