Obama Proposes $10-Per-Barrel Oil Tax for Transportation

Included in President Obama’s 2017 budget is a proposal for a $10-per-barrel oil tax, phased in over five years, to pay for a variety of transportation initiatives, including new rail corridors, highway projects, pilot projects for self-driving cars and other technologies it said fall under the goal of a “clean transportation” system.

The idea, while intriguing, has no chance of becoming law, given the Republican majority in congress.

The White House said that the tax would also “provide for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have.”

American Road & Transportation Builders Association (ARTBA) President & CEO Pete Ruane was quick to react to the proposal. “The President’s FY 2017 transportation budget proposal is an explicit admission that he and the Congress did not provide long-term sustainability for Highway Trust Fund programs when they enacted the FAST Act in December,” he said.

“The President’s proposal to levy a $10 fee on a barrel of oil to stabilize and grow Highway Trust Fund investments through user funding is exactly the type of solution that is necessary going forward. Unfortunately, the game was played last year and the President was AWOL,” Ruane continued.

“Speaker Ryan’s knee-jerk, dismissive reaction to the President’s proposal is similarly not helpful,” Ruane stated. “Where is his long-term funding solution for the nation’s highway and transit programs? Congress and the White House have an obvious choice: more budget gimmicks that defy common sense and constrain state transportation plans, or a permanent revenue fix like the per barrel fee or some other user-based mechanism. Any tax reform package that moves forward this year or next must address the Highway Trust Fund solvency problem head-on.”

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