The House Ways & Means Committee held a hearing to discuss various options for funding a new long-term surface transportation bill last week.  Among the options discussed at the hearing, were an increase in the federal gas tax and using money derived from revisions to tax policy such as repatriation of corporate income earned overseas.

Ways & Means Chairman Paul Ryan stated his opposition to increasing the gas tax, while Bill Graves, head of the American Trucking Associations, argued in favor of raising the gas tax, which has been unchanged since 1993. Many Democrats on the Ways & Means Committee expressed support for considering all options, including a gas tax increase.

Gas and diesel tax receipts no longer cover what is needed to meet spending demands. Since 2008, Congress has supplemented the highway trust fund revenue with more than $65 billion of funding from the general treasury. However, under congressional budget-scoring rules, those transfers have to be offset with savings or cuts in other areas that are difficult to find.

Robert Poole, a transportation expert with the Reason Foundation, a libertarian think-tank, testified at the hearing that the federal government should scale back its role to focus first on reconstruction and modernization of the interstate highway system and that Congress should encourage a shift away from reliance on fuel taxes to a system tied to the amount that individuals drive.

Meanwhile, the Senate Environment & Public Works Committee this week released, marked-up, and passed their draft Highway Bill, which calls for $278 billion over six years. The bill (S.1647) titled the DRIVE Act faces an uncertain future as the Senate Finance Committee will need to identify over $100 billion in new revenue to support the Highway Trust Fund to cover the costs of the bill. The EPW Committee did not identify the funding source to cover the cost of the bill and several other Senate Committees that have jurisdiction over the bill and its funding have not acted yet.