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Carbon Tax

Kerry on Senate Climate Bill: Federal Gas Tax Is Staying at 18.4 Cents

1:09 PM EDT on April 21, 2010

The several dozen transportation industry groups that raised questions about where the upcoming Senate climate change bill would send proceeds from its new "linked fee" on carbon fuels can stop worrying -- because it looks like the legislation won't contain any new tax on motor fuels.

Sen_John_Kerry_Discusses_Partnership_China_NaObORtZBHul.jpgSen. John Kerry (D-MA) (Photo: Getty)

As Sen. John Kerry (MA), the climate bill's chief Democratic author, told Reuters late yesterday:

"There is not even a linked fee. There's not a tax, there's nothing similar."

Pressedfor clarification about the fee, Kerry then said, "certainly not theway it was described previously, nothing like that." The MassachusettsDemocrat refused to elaborate.

Kerry was more direct in a response to the Houston Chronicle, stating: “The gas tax is 18.4 cents today, and it'll be that when this bill is passed.”  

His comments do not rule out the possibility of some charge on carbon-based fuels remaining in the bill, but they cast significant doubt on the scenario that Washington transportation watchers had feared most: extra fees that oil companies would pass on through higher costs at the pump, amounting to a de facto gas tax hike without guaranteed revenue for road and transit projects.

The oil and gas industry had responded favorably to the prospect of a predictable fee they could market as a response to climate change, effectively shifting any negative consumer response onto Congress rather than fuel producers. American Petroleum Institute President Jack Gerard predicted last month that a carbon charge would "soften the reaction" among his member firms to a national cap on greenhouse gases.

The challenge of addressing transportation emissions, which account for about one-third of the nation's total output, could end up pushing the release of the Senate climate bill beyond its original Monday deadline. Sen. Lindsey Graham (SC), the measure's sole GOP backer so far, told CongressDaily that Monday remains "the hope" but is not set in stone.

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