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Legislative / Policy Update

Congressional Schedule. Congress is in recess until April 29.

Should the Gasoline Tax Be Increased? When members of Congress undertake the task of reauthorizing the nation’s federal highway programs, the two biggest problems they confront are how to pay for the bill and what to call it. On the latter issue, the last three bills have been the FAST Act, MAP-21, and SAFETEA-LU, which was notable not only for working “safety” into the title but also for honoring Lu Young, the wife of Rep. Don Young (R-Alaska), who was chairman of the House Transportation and Infrastructure Committee.

[The full titles of each bill were the Fixing America’s Surface Transportation Act (2015), the Moving Ahead for Progress in the 21st Century Act (2012), and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (2005).]

The FAST Act expires Sept. 30, 2020, and lawmakers are looking to reauthorize highway programs either as part of a grand infrastructure package or perhaps in lieu of a comprehensive package. Once again, the problem is how to fund the highway/infrastructure initiatives, and once again, there is talk of raising the federal gasoline tax, which is 18.4 cents per gallon and hasn’t been increased since 1993.

Proponents

Supporters of raising the gasoline tax have an unlikely leader – the U.S. Chamber of Commerce, which admits that “this is the only tax that the Chamber ever supported increasing.” The Chamber has long advocated increasing the tax by a nickel a year for five years, which would generate an additional $375 billion over the next 10 years. Among other supporters for hiking the gas tax are the AFL-CIO, the American Trucking Associations, and possibly President Trump. Administration officials have said that a gasoline tax increase should be part of the discussion, and in private meetings, the President has reportedly expressed support for a 25-cent hike, while also floating an increase of as much as 50 cents. Whether he will actually get on board is the billion-dollar question.

States are also eyeing the gasoline tax to help rebuild their roads. On April 3, conservative Republican Gov. Mike DeWine of Ohio signed legislation increasing his state’s gasoline tax by 10.5 cents, effective July 1. The current tax is 28-cents per gallon, and DeWine had pushed for an 18-cent increase.

Opponents

Concerned about all this talk of higher gasoline taxes, Americans for Prosperity this month launched a six-figure ad campaign, with digital ads across 20 states and in 30 Congressional districts, targeting members of the Senate Finance and Environment and Public Works committees and the House Ways and Means and Transportation and Infrastructure committees. A sample ad reads, “You already pay enough in taxes. Tell your lawmakers to oppose any gas tax hike.”

Outlook

While all sides of the debate agree that more funds should be dedicated to improving the nation’s crumbling infrastructure, the impasse remains over where those funds will come from. House Democratic leaders have said they want to move a bill this year and stand ready to engage with the White House, but Rep. Peter DeFazio (D-Ore.), chairman of the Transportation and Infrastructure Committee, has indicated he won’t move forward until a funding decision is reached. That decision, Democrats say, won’t come until President Trump publicly announces how he will pay for infrastructure improvements.

USMCA Update.

ITC Report

On Thursday, April 19, the U.S. International Trade Commission released its report on the likely economic impact of the United States-Mexico-Canada Agreement (USMCA). The findings estimate the USMCA would have a moderately positive impact on the U.S. economy, raising U.S. GDP, employment, and exports and imports with Mexico and Canada. The primary sectors benefitting from the updated agreement include manufacturing and digital trade, with an expected increase in U.S. automotive production and increased certainty with new commitments to open data flows. The report is an important procedural step required by Trade Promotion Authority law (TPA) as a prerequisite for Congressional consideration of the USMCA. However, the ITC report did little to allay Democratic concerns about the agreement and whether there will be adequate enforcement of labor and environment provisions.

Mexico’s Labor Reform

In another development that is viewed as a prerequisite for USMCA consideration, the Mexican Congress is expected to give final approval to Mexico’s labor reform legislation. The Senate is on track to pass the legislation by the end of the week, following approval on April 11 in the other body, the Chamber of Deputies. Passage of the labor reform measure is intended to fulfill Mexico’s commitments under Annex 23.A of the USMCA.

Political Update

2020 Presidential Primaries. This morning, Massachusetts Congressman Seth Moulton became the 19th Democrat to announce his candidacy for President. The 40-year-old former Marine and three-term House member, whose “Serve America” PAC helped get 21 Democratic veterans elected in 2018, hopes to become the fourth Massachusetts politician to win the New Hampshire presidential primary since 1988.

Last week, presidential candidates reported their first quarter fundraising totals to the Federal Election Commission. PSW’s tracker of where the candidates stand in fundraising can be found here.

2020 Senate Races. The GOP holds a 53-47 majority in the Senate. In 2020, Republicans will defend 22 seats, compared to 12 for Democrats. With many of the contests taking place in battleground states, control of the Senate may go as the presidential election goes. Here’s a snapshot of some of the toss-up 2020 Senate seats:

  • Alabama: Sen. Doug Jones (D) won his seat by 1.5 points over embattled former Alabama Supreme Court Chief Justice Roy Moore. This race may be decided by which candidate Republicans select in the primary, with Rep. Bradley Byrne currently trailing Judge Moore in early polling. President Trump won Alabama by 28 points in 2016.
  • Arizona: Sen. Martha McSally (R) is running again after losing her 2018 Arizona Senate race to Sen. Krysten Sinema. Democrats have recruited former astronaut Mark Kelly, the husband of former Rep. Gabby Giffords, who leads McSally in Q1 fundraising. The special election in 2020 is to fill the last two years of Sen. McCain’s term.
  • Colorado: Sen. Cory Gardner (R) was the first Republican in 12 years to win a Senate race in Colorado back in 2014. Democrats have won the last four gubernatorial races and the last three presidential contests in Colorado.
  • New Hampshire: Sen. Jeanne Shaheen (D) will look to win a third term in a state that is known for its close contests. Sen. Shaheen is an early favorite, but would be in for a fight should Gov. Chris Sununu (R) enter the race.
  • Maine: Few Senators have cast more consequential votes than Sen. Susan Collins (R) since 2016. She may face both a tough primary and general election in 2020.
  • Michigan: Sen. Gary Peters (D) could face John James, who performed well in a relatively close loss to Sen. Debbie Stabenow last year. James may also consider runs in one of the two Congressional districts that Democrats flipped in 2016: MI-8 (Rep. Elissa Slotkin) and MI-11 (Rep. Haley Stevens).
  • North Carolina: Sen. Thom Tillis (R) will look to hold his seat in a state that went for Trump but elected a Democratic Governor in 2016. The 2020 GOP Convention will take place in Charlotte.
  • Georgia: Sen. David Perdue (R) won by 8 points in 2014, though this year’s contest would get considerably more interesting if Georgia House Minority Leader Stacey Abrams decides to run.
  • Iowa: Sen. Joni Ernst (R) won by 9 points in 2014 but will face a state electorate that historically fluctuates with the national voting populace.

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