Ronald Reagan caught in gas tax debate crossfire

Time to hike gas tax?
Time to hike gas tax?

With prices at the pump falling along with oil, the idea of raising the federal gasoline tax to help pay for the nation's ailing infrastructure is gaining steam.

"One of the politicians who raised the gas tax was Ronald Reagan," Pennsylvania's Democratic former Gov. Ed Rendell said Tuesday on CNBC's "Squawk Box" during a debate with anti-tax crusader Grover Norquist, an influential voice among conservatives.

As part of a 1982 transportation bill, then-President Ronald Reagan agreed to hike the 4-cent-a-gallon fuel tax to 9 cents. He said at the time: "When we first built our highways, we paid for them with a gas tax. … It was a fair concept then, and it is today."

Rendell invoked Reagan's words to make his case for increasing the gas tax from its current 18.4 cents a gallon, which was last bumped up by Bill Clinton in 1993 and was raised by George H. W. Bush in 1990.

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Norquist, founder of Americans for Tax Reform, said Reagan regretted raising taxes. "As Ronald Reagan has said, the taxes he got talked into raising was the biggest mistake he made as president."

But that's not stopping U.S. Reps. Tom Petri, R-Wis., and Earl Blumenauer, D-Ore., from using Reagan's gas tax hike support at a news conference on Wednesday, their offices said. They want to call attention to a bill they're pushing to increase the fuel tax by 15 cents over three years and tie it to inflation.

On the Senate side over the summer, Tennessee Republican Bob Corker and Connecticut Democrat Chris Murphy proposed a 12-cent increase.

Referring to the Corker-Murphy gas tax bill, Rendell said that a "12-cent increase in the federal gas tax ... would cost the average driver $140 or $150 a year."

He cited a report from the Texas A&M Transportation Institute, which found that Americans waste an average of about $818 each sitting in traffic. The former governor said there would be less congestion if the roads and bridges were not in such bad shape.

Norquist agrees that something needs to be done to fix America's aging infrastructure, but the federal government should play little part in it. "This is a bait and switch that politicians play all the time. President Obama spent $800 billion with a stimulus package, which was supposed to pave all the highways."

That did not work, Norquist said. "We should push down to governors and to mayors the responsibility for raising their own taxes and building their own roads."

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Rendell said many states do raise their own funds for infrastructure projects and enlist the private sector, but the job can't be done without the federal government's help.

But Norquist remained unconvinced. "Every state could do their own roads." Though he did concede, "If there are little pieces of it attaching states to each other the federal government could pay for that."