WASHINGTON — Nothing is off the table as a funding source for President Donald Trump’s $1.5 trillion infrastructure plan, not even a gas tax hike, Secretary of Transportation Elaine Chao said Tuesday.
Chao spoke to reporters at the White House where she accepted a check for $100,000 from Trump, who two days later said at a meeting about the infrastructure also threw out the idea of a gas and diesel tax increase as a funding source for infrastucture.
The president is donating his fourth-quarter salary in 2017 to the DOT to help address the nation’s infrastructure.
While a gas and diesel tax increase, which is not part of the plan, has been advocated by the trucking industry and the U.S. Chamber of Commerce, a reporter reminded Chao that the gas and diesel taxes have not been increased since 1993.
“The gas tax, like many of the other pay-fors that are being discussed, is not ideal,” Chao responded. “There are pros and cons. The gas tax has adverse impact, a very regressive impact, on the most vulnerable within our society; those who depend on jobs, who are hourly workers. So these are tough decisions, which is why, once again, we need to start the dialogue with the Congress, and so that we can address these issues on this very important point.”
The tax is currently 18.4 cents for gasoline and 24.4 cents for diesel and goes into the trust fund. The tax has not been raised in 25 years, the last time being during former President Bill Clinton's first year in office and only after a contentious Congressional battle.
Vice President Al Gore had to cast the deciding vote.
The trucking industry has repeatedly reminded both the current and previous administrations of the danger of not addressing the Highway Trust Fund, an issue that Chao said “needs to be addressed.”
Every year, she acknowledged, more money goes out of it than receipts are received.
“And this will be a huge problem in 2021,” Chao said. “So we, in conjunction with the Congress, have got to address this issue. So we’re not in any disagreement about that. And the issue is how, and we look forward to consulting with Congress on how to do that. Because, again, the cliff begins in 2021.”
Chao defended Trump’s plan in the face of criticism that it puts too much of a burden on the states financially because the federal portion is about 13 percent of the overall cost.
“You know, federal money is not free,” Chao said. “Federal money comes from our communities, people and taxpayers. They take that money, send it to Washington, and then we decide how to use it, and send it back to the communities with a lot of strings attached on what they need to do.”
Chao said that Trump’s plan seeks to recognize that the states and local communities understand best what “their infrastructure needs are, and to allow them to have much greater flexibility to decide their own projects, in conjunction and in partnership with the federal government.”
As for tolls, Chao acknowledged that paying to use the nation’s highways was one method of funding the infrastructure plan, but said the administration was not advocating for them nor endorsing them.
“It is really up to the local entities that are involved in trying to raise the financing,” she said.
Trump previously donated his salary to the Department of Health and Human Services, the National Park Service and the Education Department.
As a candidate, Trump vowed not to take a salary, which is $400,000 annually. By law, he must be paid, so he is donating the money.