Senate Shows Opposition to Repeal of Extra Gas Tax

The Senate Thursday made clear its firm opposition to eliminating the extra 4.3-cent-a-gallon gasoline tax that Congress imposed in 1995, signaling likely defeat of a pending Republican-sponsored repeal bill scheduled to come up next week.

The 66-34 vote against repeal--a far larger margin than expected--came on a largely symbolic proposal designed to show Senate sentiment on the issue. Repeal opponents fear that the move would reduce federal highway money that states use for transportation projects.

The vote came as the Energy Department forecast that gasoline prices would average $1.46 a gallon during the busy April-to-September driving season--well below the $1.80-a-gallon forecast it issued only a month ago.

Energy Department officials said that the changed outlook reflects an increase in global oil supplies and a vote by oil-producing countries last week to boost their output of crude oil slightly.

Pump prices currently are averaging $1.50 a gallon nationwide--29 cents a gallon more compared to this time last year. The new forecast says that prices will peak at $1.52 a gallon this month and decline to $1.39 a gallon by September.

Thursday’s Senate vote came on a nonbinding amendment to the annual resolution that sets guidelines for the federal budget.

The soaring prices at the pump had spurred Republicans to call initially for eliminating the extra fuel tax. But many GOP lawmakers have been rapidly retreating from the action over concerns that the highway trust fund, which depends on gasoline tax revenues, would be hurt.

The total federal gasoline tax, including the 4.3-cent levy, is 18.4 cents a gallon. But analysts say that repealing the extra tax would not affect the cost of gasoline to consumers materially.

In the House, Rep. Bud Shuster (R-Pa.), chairman of the Transportation Committee, estimated that repealing the extra tax would deprive the highway trust fund of $18.8 billion each year, drying up money for highway construction grants to states and localities. Governors and other state officials have been among those lobbying against the repeal proposal.

House GOP leaders already have all but abandoned the proposal and have focused instead on new tax incentives for oil producers and on opening up more federal land to oil drilling.

The Senate took a step in that direction Thursday, voting to keep in the budget resolution an assumption that the Arctic National Wildlife Refuge in Alaska will be opened to oil drilling. The step does not actually permit drilling there, but it does keep the possibility alive.

On a 51-49 vote, the Senate tabled an attempt by Sen. William V. Roth Jr. (R-Del.) to eliminate the assumption from the budget measure. Roth argued that the preserve should be protected “for all time and all generations.” But oil-state senators said such a move would be shortsighted.

California’s two Democratic senators, Dianne Feinstein and Barbara Boxer, voted against repealing the extra gasoline tax and against opening up the Arctic National Wildlife Refuge to drilling.

The Senate bill due for a vote next week that would repeal the extra gasoline tax was offered by Majority Leader Trent Lott (R-Miss.). The measure also calls for erasing all gasoline taxes if pump prices of regular gasoline exceed $2 a gallon this year.

Lott allies contended that Thursday’s vote did not necessarily assure the defeat of his proposal because the measure would leave the highway trust fund intact and replace the lost tax money through increased oil drilling on federal lands.

Analysts said that the recent surge in gasoline prices is attributable to several factors: Oil-producing countries deliberately cut their production to spur prices higher. Gasoline consumption has gone up sharply. And global supplies of oil are at near-record lows.

In California, efforts to cut taxes at the state level in response to these trends also have been thwarted. On Monday, the state Assembly’s Revenue and Taxation Committee balked at approving a GOP plan to repeal the state sales tax on gasoline, opting instead to study a variety of plans for reducing prices.