USDOT Secretary Nominee Lays out “New Climate Vision,” Backtracks on Fuel Tax
Washington D.C. – Nominee to head the United States Department of Transportation (USDOT) Pete Buttigieg testified on Capitol Hill today in a wide-ranging Senate confirmation hearing.
On Thursday, Buttigieg testified for more than two hours before the Senate Committee on Commerce, Science, and Transportation.
“Safety is the foundation of this Department’s mission and that takes on new meaning amid this pandemic,” Mr. Buttigieg said in his opening remarks.
The former mayor of South Bend, IN left no ambiguity when discussing the directives given to him from President Joe Biden.
“The President has made it very clear he expects all of us to deliver on a new climate vision,” Mr. Buttigieg declared. “Ultimately, we cannot afford not to act on climate.”
As part of that vision, Buttigieg explained the USDOT under his leadership will work to raise vehicle fuel efficiency standards and invest in vehicle electrification development.
“American companies should be leading the way in electric vehicles (EVs) and we need to do everything we can to support that,” he stated.
Mr. Buttigieg also expressed the USDOT’s goal will be to build 500,000 EV charging stations around the country to spur consumer demand.
“I think the President’s vision will create more good paying union jobs,” he predicted.
Moreover, Buttigieg indicated he is also eyeing new regulations to crackdown on carbon emissions producers noting, “The transportation sector is now the biggest contributor of greenhouse gases.”
On infrastructure, Mayor Pete urged action and argued he is uniquely qualified to help make it happen.
“Now is the time [on infrastructure] and I believe we have a real chance to deliver for the American people. As a mayor from the industrial midwest I will bring a bottom up perspective on transportation programs and funding.”
Fuel Tax Backtrack
Trucking industry groups such as the American Trucking Associations (ATA) and the Truckload Carriers Association (TCA) have long advocated raising federal fuel taxes in order to boost revenue into the Highway Trust Fund (HTF).
Federal fuel taxes were last hiked in 1993.
The federal gasoline tax still sits at 18.4 cents a gallon and tax on diesel fuel remains at 24.4 cents a gallon.
The ATA’s Build America Fund (BAF) proposal introduced in 2019 would impose a new 20 cent per gallon increase into the price of transportation fuels collected at the point of purchase.
The fee would be indexed to both inflation and improvements in fuel efficiency, with a five percent annual cap.
ATA economists estimate that the BAF tax will generate nearly $340 billion over the first 10 years.
During questioning from Committee members, Senator Mike Lee (R-UT), who opposes increasing federal fuel taxes due to the “regressive” impact, pressed Buttigieg for his view on the matter.
Mayor Pete expressed concern that given the expected rapid development of EVs, increasing federal fuel taxes could be a less effective long-term solution than perhaps the vehicle-miles-traveled (VMT) approach.
Still he left open the possibility.
“All options should be on the table,” he stated.
However, in a bit of a backtrack following today’s hearing, Buttigieg’s spokesperson told the Politico he does not support raising federal fuel taxes.
His position on the issue is a signal the Biden Administration is not keen on the idea which will not be welcomed news to trucking’s most powerful trade groups.