Getty Images Rep. Peter DeFazio of Oregon is in line to head the House Transportation and Infrastructure Committee when Democrats take control of the House in January.
There’s no “political peril” for lawmakers who would raise the gasoline tax if they show voters it will improve roads and bridges, the incoming chairman of the House Transportation and Infrastructure Committee said in an interview.
Rep. Peter DeFazio, an Oregon Democrat expected to head the committee when his party takes over the House of Representatives in January, told MarketWatch that this month’s elections showed raising gasoline taxes isn’t a political third rail, and that it’s “something we can work on” with President Donald Trump as Washington tries to fashion an infrastructure package.
Infrastructure is back in the spotlight after the midterms, with Democrats, Trump and Republican leaders all expressing interest. But paying for improvements and new projects will be the “hang up,” according to incoming House Minority Leader Kevin McCarthy, a California Republican. In this lightly edited phone interview, DeFazio talks with MarketWatch about his ideas; working with the White House; and one fight he does expect.
MarketWatch: Right after the midterms, there was enthusiasm about working together on infrastructure. But Republicans have already started questioning how it’s going to be paid for. So, what will you be proposing?
DeFazio: I had three bills in the last Congress and I expect those will be part of my agenda in this Congress. One of them is already paid for, which is to use the harbor maintenance tax to maintain harbors and stop stealing the money. The second is to allow airports to raise their passenger facility charges for the first time in 20 years. We have airports that are gated out, and bonded out, and they need to expand to accommodate passengers, or they need to reconfigure to deal with security but they don’t have the capability, so I’ll be moving that.
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The Airlines for America [trade group that represents companies including United Continental UAL, -1.02% , Southwest Airlines LUV, -0.49% , American Airlines AAL, -3.01% and FDX, -0.35% are bitterly opposed] — they say if I raise the passenger facility charge $1 no one will ever fly again, but we can charge you 50 bucks for your bag and you’re going to thank us. Basically, they’re afraid of competition. If we have more gates, then you don’t sit on the tarmac waiting for a gate, and who knows, another airline might come into that airport — oh my god, we can’t have that happen. So, that’ll be a fight, but I’m going to do that.
The big one is surface transportation. I’ve put out various proposals over the years: a barrel tax, “Penny for Progress,” there’s myriad proposals out there. The president, in my one meeting with him, advocated a substantial gas tax increase, so I think this is still something we can work on, and we’re going to need the president, because there’s a reluctance on the part of some in the Senate. But this last election demonstrated there is not political peril in raising the gas tax if you show people that you’re going to help them get out of congestion, avoid potholes, avoid detours.
“They wasted $400 billion on that jerk Larry Summers’ plan to give tax cuts too small to notice.” Rep. Peter DiFazio
In California, [incoming House] Minority Leader [Kevin] McCarthy used personal campaign funds to put on a ballot measure to repeal their gas tax and fee increase and he got his head handed to him, in more ways than one, and it pretty well peed off a lot of groups that are traditionally supporting Republicans — AGC and others. And then Tim Walz, my colleague, ran for governor of Minnesota and advocated a 10-cent gas increase. Next door, Michigan, a woman [Gov.-elect Gretchen Whitmer] — both red to blue states — advocated, she said, “fix the damn roads.”
So it’s something that’s there. It’s not my jurisdiction, so I’ve been meeting with [incoming House Ways and Means Committee Chairman] Richie Neal to talk about how we move forward. I have ideas, I have given them to Richie, and I’ll be sitting down with him some more, but ultimately he’s got to do it.
MarketWatch: You said “barrel” tax, correct?
DeFazio: That was a proposal I had at the beginning of the Obama administration to tax the fraction of a barrel of oil that gets processed for taxable transportation purposes. Essentially, Pennsylvania and Virginia have done that in a way with their rack tax, and that is very easy to collect. Theoretically, Rahm Emanuel had talked the White House into doing that in the lame duck in ‘10, but we lost the House and that was the end of that discussion, and after that, Obama stiffed us on investment in transportation, stiffed us the whole time. They wasted $400 billion on that jerk Larry Summers’ plan to give tax cuts too small to notice. If we put $400 billion into infrastructure, we’d have a hell of a better country today and we would have probably kept the House and put a lot of people to work.
MarketWatch: To be clear, you believe the president would still be on board with some form of a gasoline tax?
DeFazio: I met with the head of congressional affairs [Shahira Knight] before the election — they may have had a finger in the wind, because I didn’t even know they had a head of congressional affairs — and she has a transportation background when she worked for [former House Ways and Means Committee Chairman] Bill Thomas, and I said, “you know, it can’t be bullshit, it can’t be asset recycling, you know, ‘we’re going to toll everything, we’re going to privatize everything.’” I said there has to be real federal investment. And she said, I believe that the president will support that. So I’m going to be asking her to come in again in December and we’ll sit down and get more specific.
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MarketWatch: What about paying for infrastructure by rescinding tax cuts for the wealthy, as Senate Democrats proposed last year?
DeFazio: Since we’re borrowing, what, a trillion and a half dollars to pay for the tax cuts it doesn’t sound like real money and it doesn’t sound sustainable. If we want to do what the Republicans did and pretend we’re paying for it, and just transfer the money into the trust fund, and bond it, you know, any way we can get the substantial increase in money that goes into the trust fund I’ll support. But it’s not real. It’s just like the Republicans taking imaginary money from the Federal Reserve and pretending that we’re going to make money by having private firms collect taxes, and blah, blah, blah, blah — all the things that they threw in to pretend to pay for the last bill. We’re borrowing $89 billion to shore up the trust fund now. So that would just be another way of borrowing.
MarketWatch: Do you have bills ready to go in January, and any goals on timing for votes?
DeFazio: We’re just now working on our legislative and hearing and oversight agenda, and like I said I’m pretty much ready to go on the harbor maintenance tax and ready to go on passenger facility charge. I will probably be doing hearings before I introduce either of those bills because there are issues to be resolved. We have some of the big ports not supportive until they see a new distribution formula, and I’ve said to them, you know, let’s just get more money and then we will legislate a new distribution formula. So we’ve had reluctance there.
As I stated on the other one, passenger facility charge, the airlines are going to be totally opposed. But we’ll be doing hearings on the unmet needs for aviation, hopefully moving ahead with that. I intend to look at some modest changes in authorizing for the short term, which would be, hopefully we’ll do an infrastructure package that’s funded within six months. Again, the funding part isn’t my jurisdiction, and then we also have to be working on the six-year reauthorization at the same time.
MarketWatch: You mentioned a call or discussion with the White House. So how would you characterize your working relationship with the administration so far and looking ahead towards next year?
DeFazio: There has been virtually no relationship except [former special assistant to the president for infrastructure] DJ Gribbin liked to drink good beer, so I had him come by a couple of times, we drank beer and disagreed, and he went away and proposed asset recycling and privatization and it didn’t go over with Republicans, let alone with a Democratic House. So until the head of congressional affairs came by, I hadn’t heard from the White House for quite a while.
I think we’re just beginning a dialogue.
