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| Obama to propose $10-a-barrel oil tax to fund rail and highway projects | Obama to propose $10-a-barrel oil tax to fund rail and highway projects |
| (34 minutes later) | |
| President Obama is proposing a $10-a-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. | President Obama is proposing a $10-a-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 White House announced Thursday that the budget presented to Congress next week would include an “oil fee” that would raise “the funding necessary to make these new investments, while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have.” | The White House announced Thursday that the budget presented to Congress next week would include an “oil fee” that would raise “the funding necessary to make these new investments, while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have.” |
| Such fuel taxes have generally been hailed by economists and energy experts as economically sensible — but politically toxic. | |
| Republican congressional leaders were quick to condemn it. “Once again, the president expects hardworking consumers to pay for his out of touch climate agenda,” House Speaker Paul Ryan said in a statement. He said it was “little more than an election-year distraction” and that it would be “dead on arrival in Congress.” | |
| Senate Finance Committee Chairman Orrin Hatch (R-Utah) said “this is a backdoor gas tax hike and it’ll be hard-working American families that will have to foot the bill every time they go to the pump.” | |
| The oil tax, which would work out to about 24 cents a gallon when fully in place, would create incentives for the private sector to use oil products more efficiently, thus reducing the amount of climate-changing carbon dioxide released into the atmosphere. Such a tax has even been supported by a handful of oil industry executives. | The oil tax, which would work out to about 24 cents a gallon when fully in place, would create incentives for the private sector to use oil products more efficiently, thus reducing the amount of climate-changing carbon dioxide released into the atmosphere. Such a tax has even been supported by a handful of oil industry executives. |
| Jeff Zients, director of the White House National Economic Council, said that the tax would be paid by oil companies, but the companies would inevitably pass most or all of the tax to consumers of gasoline, diesel and heating oil. Zients said that the fee would apply to imported crude and petroleum products, but not to U.S. petroleum exports — to prevent U.S. producers and refiners from being put at a competitive disadvantage in foreign markets. | Jeff Zients, director of the White House National Economic Council, said that the tax would be paid by oil companies, but the companies would inevitably pass most or all of the tax to consumers of gasoline, diesel and heating oil. Zients said that the fee would apply to imported crude and petroleum products, but not to U.S. petroleum exports — to prevent U.S. producers and refiners from being put at a competitive disadvantage in foreign markets. |
| The timing of the proposal, coinciding with one of the steepest drops in oil prices in the past decade and a half, could make it easier for consumers to digest. The administration also said that it would provide assistance to families to ease energy cost burdens, focusing on households in the Northeast where many still use fuel oil for winter heating. | The timing of the proposal, coinciding with one of the steepest drops in oil prices in the past decade and a half, could make it easier for consumers to digest. The administration also said that it would provide assistance to families to ease energy cost burdens, focusing on households in the Northeast where many still use fuel oil for winter heating. |
| [What’s so significant about oil prices at $30 per barrel] | [What’s so significant about oil prices at $30 per barrel] |
| Zients did not say how much revenue the new tax would generate, but at the current rate of oil consumption, about 19 million barrels a day, the tax would raise about $65 billion a year when fully phased in. | Zients did not say how much revenue the new tax would generate, but at the current rate of oil consumption, about 19 million barrels a day, the tax would raise about $65 billion a year when fully phased in. |
| Zients said that while at least part of the tax would be passed on to consumers, he said that the current transportation infrastructure was imposing costs on people who wasted time and burned extra fuel while stuck in traffic. He added that new infrastructure projects would generate jobs. | Zients said that while at least part of the tax would be passed on to consumers, he said that the current transportation infrastructure was imposing costs on people who wasted time and burned extra fuel while stuck in traffic. He added that new infrastructure projects would generate jobs. |
| Zients said that the administration would also again propose business tax reform and use part of the one-time surge in revenues from untaxed funds returned from abroad to help pay for the infrastructure program. | Zients said that the administration would also again propose business tax reform and use part of the one-time surge in revenues from untaxed funds returned from abroad to help pay for the infrastructure program. |
| The administration said it would devote $20 billion of the money raised to expand transit systems in cities, suburbs and rural areas; make high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev; modernize the nation’s freight system; and expand the Transportation Investment Generating Economic Recovery program launched in the 2009 economic stimulus bill to support local projects. | The administration said it would devote $20 billion of the money raised to expand transit systems in cities, suburbs and rural areas; make high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev; modernize the nation’s freight system; and expand the Transportation Investment Generating Economic Recovery program launched in the 2009 economic stimulus bill to support local projects. |
| The budget would also use roughly $10 billion per year in revenues for shifting how local and state governments design regional transportation projects. | The budget would also use roughly $10 billion per year in revenues for shifting how local and state governments design regional transportation projects. |
| Obama would also propose investing just over $2 billion per year in “smart, clean vehicles” and aircraft by expanding research and development into such technologies. | Obama would also propose investing just over $2 billion per year in “smart, clean vehicles” and aircraft by expanding research and development into such technologies. |