It’s been done before—by a Republican President, no less.
Facing a transportation bill set to expire at the end of this month, Congress did what everyone expected it to do: punted. The two-month micro-extension will get lawmakers through July, when they’ll have to do the whole thing over again. It’s reportedly the 33rd time in six years Congress has resorted to a temporary transportation patch—a series of insulting stumbles that makes it difficult for local government to arrange any sort of long-term road or rail plans.
At the core of the problem is a pervasive reluctance to raise the busted gas tax that pays for federal transportation spending on highways and some mass transit. Such a move is seen as political suicide. And so the 18.4 cents-per-gallon rate hasn’t moved since 1993, even as America’s gas taxes remain among the lowest in the world, and even as its infrastructure continues to crumble.
Making difficult decisions in the service of a good transportation bill is supposed to be difficult: that’s what our vote is for. But Jeff Davis of the Eno Center for Transportation reminds us that raising the gas tax hasn’t always been impossible in a delightful and comprehensive new history of Ronald Reagan’s effort to do just that in 1982. So it’s been done before—by a Republican President, no less. Here’s the upshot from Davis:
As today’s policymakers search for revenue options to put the Highway Trust Fund back on a path to solvency, the lessons of how a politically divided Congress dealt with the issue are still relevant more than 30 years later.
The gas tax was busted in 1982—just like today.
The gas tax hike of 1982 was the last time it was raised for the strict purposes of funding transportation; subsequent hikes, in 1990 and 1993, were initially sold as ways to balance the federal budget. As the story goes, a Republican President who was heavily opposed to tax increases and big government worked with a split Congress to more than double the old gas tax—from 4 to 9 cents a gallon—for the good of the country. “The reality is a bit messier,” writes Davis.
Transportation funding wasn’t in much better shape at the time. The federal gas tax had been stuck at 4 cents since 1959 (that’s 23 years, or one more year than the current 22-year drought going back to 1993). Construction costs had soared some 152 percent since 1972, even as gas tax revenue has grown just 38 percent. Government reports were saying that the gas tax needed to rise and perhaps to be indexed to inflation—just as they do today.
The Secretary of Transportation, Drew Lewis, made a series of pitches to Reagan about the need to raise the gas tax:
- Lewis first tried to sell the idea by gaining support of the urban mass transit lobby. The idea was they would receive 20 percent of the new funding—a penny for every nickel raised. But Reagan initially felt such a move conflicted with his goal of achieving “Federalism,” or devolving responsibility from the federal government down to the state level.
- For his second attempt, Lewis appealed his pitch to Reagan’s Federalist sensibilities. He put the word “federalism” in the title of his proposal and used it 11 times throughout. He also emphasized the high social costs of failing infrastructure. Reagan passed again, telling reporters that he wouldn’t raise the gas tax “unless there’s a palace coup and I’m overtaken or overthrown.”
- Lewis’s third (and ultimately final) proposal emerged just as recession was hitting the country and the GOP got hit hard during the 1982 midterm elections. Officials from both parties—including Democratic Speaker of the House Tip O’Neill—publicly supported a 5-cent hike. Lewis packaged the idea as capable of increasing construction jobs within 90 days of its passage.
Here’s six lessons for Congress today.
On November 23, 1982, Reagan approved of the idea. (When asked by a reporter if there’s been “a palace coup,” he gave a garbled answer about how that had been said in a different context.) The Gipper addressed the American public a few days later, using words that could easily be echoed today:
“So, what we’re proposing is to add the equivalent of 5 cents per gallon to the existing Federal highway user fee, the gas tax. That hasn’t been increased for the last 23 years. The cost to the average motorist will be small, but the benefit to our transportation system will be immense...”
Eno’s Davis highlights a number of lessons that lawmakers could (at least theoretically) draw from the experience. Persistence counts. Devolution—an approach many still support for transportation funding—has its flaws; many states worried about raising enough money to make up for what they lost. Congress can force a President’s hand, especially with an announcement of bipartisan support for a bill. Failure to pass a temporary, one-year patch had increased pressure for a longer solution.
And, last but not least, “compromise” is not a sin; here’s Davis quoting Chief of Staff James Baker:
“If Reagan told me once, he told me fifteen thousand times–I’d rather get 80 percent of what I want than go over the cliff with my flags flying.”
It’s probably time to retire the gas tax.
On one hand, there’s some comfort in knowing that, strictly speaking, it’s possible to raise transportation funding for the sake of transportation. Lately lawmakers have resorted to roundabout methods to pay for roads and rails, often grabbing from the general taxpayer fund to do so. That’s an unsustainable (and arguably illegal) approach that masks the real problem: the price of driving in America doesn’t cover its true costs.
On the other hand, the circumstances that conspired to achieve the 1982 hike may be unique to that historical moment. The nature of the gas tax itself—hidden away in fuel prices—also obscures progress in this conversation. It’s hard for anyone to know just how much they personally contribute to highway maintenance and construction, let alone that it’s nowhere near enough.
The best way to lose this illusion would be to replace the gas tax with a per-mile driving fee that made it painfully clear how much it costs to drive—and that could be adjusted for all the social nuisances that car-reliance creates, from pollution to congestion to traffic deaths. But Davis’s history shows us how difficult it is for federal officials to work with what’s already in front of them. Bold leadership in a brand new direction is something we’re unlikely to see anytime soon.