June 6, 2016

The House of Representatives has scheduled votes for later this week on two non-binding “sense of Congress” measures designed to allow legislators to go on record as opposing any new taxes or fees on petroleum specifically or on carbon generally.

House Majority Whip Steve Scalise (R-LA) has introduced H. Con. Res. 89, which expresses the Senate of Congress that “a carbon tax would be detrimental to American families and businesses, and is not in the best interest of the United States.” Scalise’s Pelican State colleague, Charles Boustany (R-LA), has introduced H. Con. Res. 112, which expresses the findings of Congress that any new oil and gas tax would cause more layoffs in the industry and “would raise the price of oil, and by extension gasoline; and would result in a decrease in the consumption of oil” and then expresses the sense of Congress that “a new tax should not be placed on oil…” and that any new policy should be cognizant of the potential job losses in the oil and gas industry.

The Boustany resolution also notes that “this tax could translate into as much as 25 cents on a gallon of gas, when the Federal tax on gasoline is currently 18.40 cents per gallon…”

Both measures have the potential to reinforce opposition to any kind of petroleum-based tax increase, including the aforementioned federal excise tax on gasoline (18.3 cents per gallon of which currently goes to the Highway Trust Fund), as well as diesel fuel taxes (also HTF) or the general aviation fuel taxes that put a small amount of revenue into the Airport and Airway Trust Fund. (However, it is worth remembering that Congress did vote almost unanimously to increase the tax on the diesel fuel used by barges by 45 percent in December 2014 – but only through unusual means that are not likely to work again.)

The Boustany resolution is also a direct swipe at the centerpiece of President Obama’s final budget – the $495 billion “21^st Century Clean Transportation Spending Initiative” that would have included an additional $17.9 billion in funding for highways, transit, railroads and other surface transportation programs in FY 2017 above the levels called for in the just-enacted FAST Act. The President’s proposed $10.25 per barrel tax/fee on crude oil would have provided a net $319 billion over ten years for such programs (using the White House’s receipt estimates), as shown in the table below.