POLITICS

Moderate Democrats Narrowly Avoid A Gas Tax Trap

Infrastructure negotiations highlight the fact that ideas popular inside the Beltway can be toxic outside of it.

President Joe Biden’s White House spent much of the weekend and Monday killing the idea of including a gas tax increase in a bipartisan infrastructure deal ― and potentially saving the Democratic Party from a massive unforced political error.

“That is a nonstarter,” White House press secretary Jen Psaki said at her daily press briefing, noting it would violate the president’s pledge not to raise taxes on people making less than $400,000 a year. 

Psaki’s elimination of any wiggle room delivered relief to Democratic strategists who had quietly panicked over the possibility of two vulnerable Senate Democrats facing reelection in 2022 endorsing a gas tax hike ― an idea that public and private Democratic surveys indicate is deeply unpopular with voters.

The near-mistake ― linking the gas tax to inflation was included in an outline of the bipartisan infrastructure proposal released last week ― highlighted how moderate members of Congress routinely assume ideas popular with interest groups in Washington are equally popular with the voting public. It also showed how Democrats have significantly more political exposure to a potential backlash in any deal. 

It’s unclear how close a gas tax hike came to inclusion in the still-developing deal, which could funnel close to an additional $600 billion toward the nation’s infrastructure needs. Senators in both parties said an increase was off the table as of Monday night, as the provision would have raised a relatively paltry $30 billion over 10 years.

One of the vulnerable Democrats negotiating the package, Arizona Sen. Mark Kelly, would have not voted for a hike, a spokesperson said.

“Senator Kelly does not support an increase in the gas tax,” Kelly spokesperson Jacob Peters, told HuffPost in a statement. “He is continuing to work with Republicans and Democrats to advance Arizona’s infrastructure priorities and ensure these investments do not fall on the shoulders of working families.”

Public surveys indicate hiking corporate taxes is far more popular than raising the gas tax.
Public surveys indicate hiking corporate taxes is far more popular than raising the gas tax.

New Hampshire Sen. Maggie Hassan, the other Democrat facing a potentially tough reelection fight who is part of the group negotiating the plan, did not respond to requests for comment. 

Indexing the gas tax to inflation has clear policy merits. There’s long been a consensus among transportation policy wonks that road users ― be they everyday commuters or the trucking industry ― should bear most of the cost for maintaining and building highways and bridges.

Unlike most taxes, the per-gallon nature of the gas tax means the value of revenue it generates declines over time. Since the 1993 hike that brought the federal gas tax to its current 18.4 cents per gallon, the levy has lost roughly two-thirds of its purchasing power. 

For this reason, the gas tax has long attracted support from interest groups on both sides of Washington’s political divide. Advocates love to note that both the AFL-CIO and the Chamber of Commerce endorse hiking it. But there’s been one problem: The public hates the idea, with two-thirds majorities routinely expressing opposition. 

“The gas tax is the quintessential issue that Beltway people want voters to think is good, but that voters absolutely hate,” said Sean McElwee, who runs the progressive polling operation Data for Progress. 

Data for Progress surveys, as well as nonpartisan polls, have repeatedly shown voters strongly prefer raising the corporate tax rate as a way to pay for an infrastructure plan. That idea, predictably, has far less support among Washington interest groups, and Republicans have ruled out any changes to their 2017 tax law. 

Many Democratic strategists, in fact, think the party needs to pick a fight over corporate taxes ― something moderate Democrats are set to skip over for the sake of bipartisanship.

“It’s absurd that we’re talking about raising gas taxes, user fees, and putting it on everyday Americans instead of asking the world’s largest corporations to pay their fair share,” said Tyler Law, a principal at AKPD Message and Media. “It’s a massive missed opportunity to not have the debate over corporate taxes.”

The potential political pain for Kelly and Hassan exposed another dynamic that could shape the still-fragile bipartisan negotiations. Democrats are set to defend four Senate incumbents widely seen as vulnerable in 2022 ― Kelly, Hassan, Georgia Sen. Raphael Warnock and Nevada Sen. Catherine Cortez Masto. Of those, Kelly and Hassan are almost certain to vote for any eventual infrastructure deal.

Republicans are defending open seats in Pennsylvania and North Carolina, along with Wisconsin Sen. Ron Johnson and Florida Sen. Marco Rubio. There is little chance that either Johnson or Rubio will vote for an eventual deal. That means Democrats are taking on significantly more short-term political risk in embracing any politically treacherous parts of a bipartisan agreement than Republicans.