At a meeting with key Senators Monday evening Transportation Secretary Ray LaHood, together with OMB Deputy Director Rob Nabors and National Economic Council Deputy Director Jason Furman, estimated that the shortfall in revenues flowing into the federal Highway Trust Fund between now and the 2010 elections will be $20 billion, but nevertheless reiterated the Obama administration's opposition to any motor fuel tax increase to close the burgeoning gap in funding. Last year the first ever deficit in the Highway Trust Fund was closed by Congress with an $8 billion appropriation from general revenues, but a similar $20 billion appropriation to carry the fund past the 2010 election cycle seems unlikely, given the stimulus bill already passed this year, and other deficit exploding legislative initiatives including health care reform and climate change which are on the Congressional docket right now.
Administration officials are parsing the math on "loophole closers" such as reduction of the favored tax status of oil and gas production, known as "depletion allowances," though such tax measures could also affect other types of mining operations in addition to oil and gas. Although any such tax code changes would likely result in price increases at the pump, they would be less direct than a motor fuel tax increase, and therefore politically more palatable to the Obama administration, which would rather be seen as taxing corporations than as taxing consumers.
Administration officials are parsing the math on "loophole closers" such as reduction of the favored tax status of oil and gas production, known as "depletion allowances," though such tax measures could also affect other types of mining operations in addition to oil and gas. Although any such tax code changes would likely result in price increases at the pump, they would be less direct than a motor fuel tax increase, and therefore politically more palatable to the Obama administration, which would rather be seen as taxing corporations than as taxing consumers.
