Cancer Spending v. National Defense Spending in the US

via calamitiesofnature.com

Pentagon Review: Less Troops on the Ground

5 January 2012 Last updated at 10:43 ET, BBC News

Pentagon military review ‘will axe US troops’

The US is to axe thousands of troops as part of a far-reaching defence review aimed at coping with huge budget cuts over the next decade, officials say.

The changes – to be unveiled on Thursday – are likely to end a decades-old policy of maintaining the strength to fight two wars at once.

President Barack Obama will announce the plans with Defence Secretary Leon Panetta at the Pentagon on Thursday.

The Pentagon faces more than $450bn (£288bn) in cuts in the next 10 years.

Another $500bn in cuts could be looming at the beginning of 2013, after a congressional committee failed to act on finding budget savings last year.

Despite this Mr Obama, wary of the upcoming presidential election, is expected to emphasise that the US military budget is continuing to grow, albeit at a slower pace.

US officials have sought to portray the president as taking a deliberate approach to defence spending, insisting any troop reductions will be informed by a review of strategy by commanders.

White House spokesman Jay Carney described the planned cuts as “surgical”. The president is also reported to have been closely involved in the decision-making process.

No specific cuts or troop reduction figures will be announced on Thursday, reports say, but the White House said the review “will guide our budget priorities and decisions going forward”.

Reuters news agency says officials are considering a 10-15% reduction in the US Army and Marine Corps over 10 years – equivalent to tens of thousands of troops.

Future in Asia

The US is expected to make several large long-term strategic changes as a result of budget pressures, including reducing the overall number of ground troops and strengthening air and naval power in Asia.

BBC diplomatic correspondent Jonathan Marcus says more US troops are likely to be brought home from Europe.

Our correspondent says the focus for the future looks to be on what the Pentagon calls “the Air-Sea Battle” – the creation of forces capable of containing a rising military player in the Asia-Pacific region. He says it is clearly China that the US officials are thinking of.

Defence Secretary Leon Panetta made clear last autumn that Asia would be central to US security strategy, including countering China’s influence in the region, describing the Pacific as a “key priority”.

Backing away from a potential two-war footing has been debated in the Pentagon for years.

In June 2001, then-Defence Secretary Donald Rumsfeld told Congress the two-war strategy was “not working”.

And when the US was in fact fighting two wars – in Iraq and Afghanistan – the military suffered a shortage of manpower.

The expected change in strategy would prepare the US to fight one war while waging a holding operation elsewhere to “spoil” a second threat.

Officials say they are using recent examples to guide their decisions.

“As Libya showed, you don’t necessarily have to have boots on the ground all the time,” an unnamed official told Reuters. “We are refining our strategy to something that is more realistic.”

Yet many of the Nato allies in Libya are facing similarly tight defence budgets, and Mr Obama is likely to face criticism from defence hawks in Congress, including Republicans and those seeking to challenge him for the presidency in November.

Detaining citizens indefinitely is as American as apple pie!

Obama Signs Defense Bill Despite ‘Serious Reservations’

Barack Obama Defense Bill
First Posted: 12/31/11 03:25 PM ET Updated: 12/31/11 06:22 PM ET, The Huffington Post

WASHINGTON — Indefinite military detention of Americans became the law of the land Saturday, as President Barack Obama signed a defense bill that codified that authority, even as he said he would not use it.

The National Defense Authorization Act states how the military is to be funded, but also includes a number of controversial provisions on arresting and holding suspected terrorists, which at first drove Obama to threaten a veto.

He retreated from that threat after Congress added provisions that took the ultimate authority to detain suspects from the military’s hands and gave it to the president. Congress also clarified that civilian law enforcement agencies — such as the FBI — would still have authority to investigate terrorism and added a provision that asserts nothing in the detention measures changes current law regarding U.S. citizens.

Still, the signing on New Year’s Eve as few people were paying attention angered civil liberties advocates, who argue that the law for the first time spells out certain measures that have not actually been tested all the way to the Supreme Court, including the possibility of detaining citizens in military custody without trial for as long as there is a war on terror.

“President Obama’s action today is a blight on his legacy because he will forever be known as the president who signed indefinite detention without charge or trial into law,” said Anthony Romero, executive director of the American Civil Liberties Union.

“The statute is particularly dangerous because it has no temporal or geographic limitations, and can be used by this and future presidents to militarily detain people captured far from any battlefield,” Romero added. “The ACLU will fight worldwide detention authority wherever we can, be it in court, in Congress or internationally.”

The administration was especially sensitive about the law and about reaction to the president signing it. In addition to enacting the measure while few people were paying attention — and many opponents still had hopes the president would veto the bill — the White House added a signing statement specifying that the Obama administration would not detain Americans without trial. The White House also sent out a notice to its online community highlighting Obama’s complaints with the law, in a tacit admission that many of the president’s more ardent supporters despise the detention provisions.

“I have signed this bill despite having serious reservations with certain provisions that regulate the detention, interrogation, and prosecution of suspected terrorists,” Obama said in the signing statement.

Presidents issue such statements when they feel a law conflicts with the executive’s constitutional powers. Obama criticized them during the Bush administration, but has found the practice useful on a handful of occasions.

In this case, Obama argued that the changes Congress made to the bill affirm only authorities that the Bush and Obama administrations have already claimed in fighting terrorism. But he noted that the codification of those powers in law was unnecessary and perhaps harmful. And he insisted he would not use the powers to detain citizens without trial.

“I want to clarify that my administration will not authorize the indefinite military detention without trial of American citizens,” Obama wrote. “Indeed, I believe that doing so would break with our most important traditions and values as a Nation. My administration will interpret section 1021 [of the bill] in a manner that ensures that any detention it authorizes complies with the Constitution, the laws of war, and all other applicable law.”

Civil liberties advocates like Romero pointed out that once the provisions are law, however, they will be available to a President Newt Gingrich or Mitt Romney or any future president, who could choose to use the powers granted more aggressively.

“We are incredibly disappointed that President Obama signed this new law even though his administration had already claimed overly broad detention authority in court,” said Romero. “Any hope that the Obama administration would roll back the constitutional excesses of George Bush in the war on terror was extinguished today.”

Because of the provisions specifying that the new legislation does not change current law, the new law leaves the authority it grants open to interpretation and to the possibility — albeit in very difficult circumstances — of someone challenging a detention through the courts.

“Thankfully, we have three branches of government, and the final word belongs to the Supreme Court, which has yet to rule on the scope of detention authority,” Romero said. “But Congress and the president also have a role to play in cleaning up the mess they have created, because no American citizen or anyone else should live in fear of this or any future president misusing the NDAA’s detention authority.”

Obama also said he will not abide by the law’s requirement to detain terror suspects using the military.

“I reject any approach that would mandate military custody where law enforcement provides the best method of incapacitating a terrorist threat,” Obama said. “While section 1022 is unnecessary and has the potential to create uncertainty, I have signed the bill because I believe that this section can be interpreted and applied in a manner that avoids undue harm to our current operations.”

Finally, he rejected a number of other provisions, saying the White House is concerned they interfere with the president’s constitutional powers and ability to fight terrorism.

“My Administration will aggressively seek to mitigate those concerns through the design of implementation procedures and other authorities available to me as Chief Executive and Commander in Chief, will oppose any attempt to extend or expand them in the future, and will seek the repeal of any provisions that undermine the policies and values that have guided my Administration throughout my time in office,” Obama warned.

Payroll tax extensions…or not…we may never know!

House GOP delays vote on Senate two-month payroll tax extension

By Erik Wasson, Russell Berman and Molly K. Hooper – 12/19/11 08:33 PM ET

House GOP leaders have decided to delay a vote on the Senate payroll tax bill until midday Tuesday, abandoning tentative plans to hold votes as late as 3 a.m. Tuesday morning.

The party whip, Rep. Kevin McCarthy (R-Calif.), attributed the delay in the vote to the Republican pledge to not pass legislation in the middle of the night, as they had criticized House Democrats for doing. The votes on Tuesday, he said, will occur “in the light of day.”

In a rare move, the GOP leaders sought to align themselves with President Obama, saying their push for a yearlong extension was “exactly what the president asked us to do.”

House leaders also appear to be looking to avoid a separate, up-or-down vote on the Senate payroll tax bill.

House freshman are adamant in their opposition to the Senate bill and favor a year-long extension of the payroll tax holiday, but centrist Republicans  in the conference would not come out against the short term bill when asked about it after a GOP conference meeting on Monday night.

The Senate approved the measure in an overwhelming bipartisan 89-10 vote, and several Senate Republicans on Monday urged the House to approve the measure.

With Democrats planning to support the measure, Republicans cannot afford many defections on an upcoming vote.

Speaker John Boehner (R-Ohio) insisted the House would defeat the bill, however, and Republicans at the Monday meeting said few in any of their colleagues spoke out in favor of the two-month extension at the meeting.

One exception was Rep. Charlie Bass (R-N.H.), who told The Hill, “I’m thinking about it, I really am.” Rep. Chris Gibson (R-N.Y.) earlier on Monday said he would support the Senate bill.

Another possible question-mark, centrist New York Republican Rep. Peter King told The Hill that he would support the leadership’s course of action on the extenders package.

A vote just on a motion to convene a conference committee could give politically vulnerable members the wiggle room to support Boehner without entirely voting against a two-month extension of the payroll tax.

“I think we have to vote down what the Senate sent back but there is a way to do it where we are voting yes,” said Rep. Michael Burgess (R-Texas).

House Rules Committee Chairman David Dreier (R-Calif.) said he could not say if his committee would consider a rule for that up-or-down vote.

House Republican leaders emerged from the closed-door meeting determined to force the Senate into a conference committee. “Our members do not want to just punt and do a two-month, short-term fix where we have to come back and do this again,” Speaker John Boehner (R-Ohio) told reporters. “We’re here. We’re willing to work.”

Majority Leader Eric Cantor (R-Va.) said House Republicans “outright reject the attempt by the Senate to kick the can down the road for 60 days. It’s an unworkable solution.”

Boehner was pressed on why he did not warn Senate Republican Leader Mitch McConnell (Ky.) that the compromise he struck with Senate Majority Leader Harry Reid (D-Nev.) would not fly with the House GOP.

“I made it clear to Senator Reid and Senator McConnell that the House was not going to enter into negotiations until such time as the Senate did its job,” Boehner said. “It was time for the Senate to produce something. We disagreed with what the Senate produced.”

He did not answer directly when asked if McConnell had struck “a bad deal.”

“They did their job. They produced a bill. The House disagrees with it,” the Speaker said.

No More Mr. Nice Guy

Rep. Waters urges Obama to drop nice-guy act and fight Republicans, Tea Party

By Mike Lillis – 09/22/11 08:03 PM ET, The Hill

President Obama should quit watching sports and drinking beer with his political opponents in hopes it will lead to GOP cooperation, Rep. Maxine Waters said Thursday.

The outspoken California Democrat said Obama needs to fight harder for Democratic policy priorities in the face of entrenched opposition from Republicans and the Tea Party.

“He’s been very nice about it,” Waters said of Obama’s budget negotiations with Republicans. “He’s been on the other side of the aisle talking with people. He’s invited them up to the White House to have beer. He’s invited them to come and watch the Super Bowl games.“He’s done all of that, and when they eat his food and drink his beer and leave, then they go and try to kill him [on Capitol Hill],” she told an audience gathered for the Congressional Black Caucus (CBC) Foundation’s annual legislative conference in Washington.

“You’ve gotta fight — you will not win this battle without fighting,” she added.

Many House liberals have been disenchanted with Obama going back to December, when the president accepted GOP demands that the Bush-era tax rates be extended to even the wealthiest Americans — a provision strongly opposed by most Democrats.

The president drew similar liberal criticism this summer for backing enormous cuts in both a 2011 spending bill and legislation to raise the debt ceiling. More recently, some CBC members wondered aloud why Obama didn’t visit any urban areas on his August jobs tour through the Midwest.

Obama this month has taken steps to silence his liberal critics, adopting a more combative tone, for instance, in his Sept. 8 address before a joint session of Congress. Liberals are also cheering Obama’s proposal to eliminate the same tax rates for the wealthy that he’d backed in December.

Still, Waters suggested Thursday that CBC members remain wary of Obama’s willingness to fight for liberal priorities when the going gets tough.

“We love the president. We want him to be successful,” Waters said. “But does he feel our pain? Does he understand what’s going on out here?”

The White House did not respond to a request for comment.

Waters, who heads the CBC’s jobs taskforce, said she’s encouraged by Obama’s new proposal to address unemployment and rein in deficit spending. But she also warned that the group will be watching closely as the high-stakes budget negotiations evolve.

“We’re pleased that the president has a jobs proposal. Now we have to trace it and to track it … because strange things happen in the legislative process. We don’t want this to end up being just a tax-cut deal only,” she said.

“I love the president,” she added, “but I will ask the president, ‘Where’s the money?’ ”

Waters suggested the black community needs to become more involved if it wants Washington lawmakers to take notice, for instance, that the recession hit minority communities much harder than it did white populations.

“We have got to show up. The Tea Party shows up. The Tea Party intimidates everybody,” she said. “We have to show people that we have no fear. Don’t mistake the silence for intimidation.”

Waters generated headlines last month when, amid a CBC job-promotion tour, she said the Tea Party “can go straight to hell.”

On Thursday, she wasn’t apologizing.

“Yes, I was displayed in national media telling them where to go,” she said. “And I mean that.”

If anyone in the audience was surprised by Waters’s trenchancy, they shouldn’t have been. Indeed, the California Democrat had warned the crowd that she wouldn’t be holding her tongue.

“Please be worried about what I’m going to say,” she said at the start of her remarks,” because I’m going to say it anyway.”

No Social Security in Negotiations

Obama Won’t Include Social Security Reform In Recommendations To Super Committee

Obama Social Security
First Posted: 9/15/11 12:08 PM ET Updated: 9/15/11 12:08 PM ET, Huffington Post

WASHINGTON — Jilted by Republican leadership during the deficit-reduction talks that accompanied the debt ceiling debate, the Obama administration is now pulling back an offer to put Social Security reform on the negotiating table.

The president will not include changes to that program in the series of deficit reduction measures that he will offer to the congressional super committee next Monday, administration officials confirm.

During talks with House Speaker John Boehner (R-Ohio) this past summer, President Barack Obama had discussed changing the way that Social Security benefits were paid so that a lower level of benefits were paid over time. Boehner walked away from that deal, which was part of a much broader package, because of concern over a corresponding tax increase. Now, Obama is putting off support for that idea of changing the inflation formula of Social Security to chained consumer price index (CPI).

“The president’s recommendation for deficit reduction will not include any changes to Social Security because, as the president has consistently said, he does not believe that Social Security is a driver of our near and medium term deficits,” said White House spokeswoman Amy Brundage. “He believes that both parties need to work together on a parallel track to strengthen Social Security for future generations rather than taking a piecemeal approach as part of a deficit reduction plan.”

“There will be no Social Security in the recommendations,” Brundage added.

The White House’s decision to take Social Security reform off the table for the time being, which was first reported by the Wall Street Journal, is largely consistent with the president’s viewpoint that the program is not a contributor to the deficit and should be dealt with in separate discussions. The administration brought it in to the “grand bargain” talks with Boehner, an official relayed, because the president was a party to those talks. With respect to the super committee’s negotiations, he will have no seat at the table and is merely outlining his preferences for reform.

The move also makes obvious political sense. Democrats have long worried that they would upset their base should they be seen as the ones chipping away at retirement benefits, certainly after House Republicans took heat for passing a budget that would convert Medicare into a voucher-based program.

Already suffering from an enthusiasm gap, Obama’s decision to put off Social Security cuts will win him plaudits from his own party. But it still remains to be seen what type of recommendations he will make with respect to Medicare. During the negotiations with Boehner, the White House signed off on a recommendation to increase the eligibility age of Medicare from 65 to 67. Administration officials refused to say whether that recommendation would be part of the president’s proposal to the super committee. On Thursday, the Washington Post reportedthat the White House would call for “at least $340 billion in savings from Medicare and Medicaid” alongside $800 billion in tax increases.

The 12-member committee has no obligation to act on the president’s proposals, though it seems likely that its six Democratic members will hew to the administration’s line. The committee’s recommendations will be unveiled sometime around Thanksgiving, with hopes of a vote in Congress toward the end of December.

A Word from Warren Buffet

Stop Coddling the Super-Rich

By WARREN E. BUFFETT, Op-Ed The New York Times, August 14, 2011

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

$pecial Interests

Special interests gave millions to budget panel

APBy JACK GILLUM – Associated Press | AP – Fri, Aug 12, 2011
WASHINGTON (AP) — The 12 lawmakers appointed to a new congressional supercommittee charged with tackling the nation’s fiscal problems have received millions in contributions from special interests with a direct stake in potential cuts to federal programs, an Associated Press analysis of federal campaign data has found.

The newly appointed members — six Democrats and six Republicans — have received more than $3 million total during the past five years in donations from political committees with ties to defense contractors, health care providers and labor unions. That money went to their re-election campaigns, according to AP’s review.

Supporters say the lawmakers were picked for their integrity and experience with complicated budget matters. But their appointments already have prompted early concerns from campaign-finance watchdog groups, which urged the lawmakers to stop fundraising and resign from leadership positions in political groups.

The congressional committee, created as part of the debt limit and deficit reduction agreement enacted last week, is charged with cutting more than $1 trillion from the budget during the coming decade. If the committee doesn’t decide on cuts by late November — or if Congress votes down the committee’s recommendations — spending triggers would automatically cut billions of dollars from politically delicate areas like Medicare and the Pentagon.

The lawmakers represent a large swath of political ideology and geography, but they have some things in common: They received more than $1 million overall in contributions from the health care industry and at least $700,000 from defense companies, the AP found. Those two industries, especially, are sensitive to the outcome of the committee’s negotiations because the automatic spending cuts could affect them most directly.

The committee’s co-chairs — Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Texas — each received support from lobbyists and political committees, including those with ties to defense contractors and health care lobbyists. Hensarling’s re-election committee, for instance, received about $11,000 from Lockheed Martin and $8,500 from Northrop Grumman.

Companies like Lockheed rely heavily on government contracts: More than 80 percent of Lockheed’s net sales during the first six months of 2011 came from the U.S. government, according to Securities and Exchange Commission records. And in SEC filings two weeks ago, Northrop expressed concern of a “material adverse effect” on its finances had the debt ceiling not been raised.

The other panel members are Sens. Max Baucus, D-Mont.; John Kerry, D-Mass.; Jon Kyl, R-Ariz.; Pat Toomey, R-Pa.; and Rob Portman, R-Ohio; and Reps. Jim Clyburn, D-S.C.; Xavier Becerra, D-Calif.; Chris Van Hollen, D-Md.; and Michigan Republicans Dave Camp and Fred Upton.

The AP’s analysis shows the extent to which special interests have directly supported the 12 members during their tenures in Congress, including support from agriculture businesses ($600,000) and labor unions ($580,000). Big checks also came in from the banking and insurance industry.

The extent of potential conflicts could be even greater than the AP’s analysis shows. The AP measured contributions from industry PACs to lawmakers’ election committees. But it didn’t capture amounts from independent expenditures, such as donations, from defense executives and their families or money given to leadership political committees.

Even still, influence can extend beyond direct campaign contributions. Senate records show that Murray, also the chairwoman of the Democratic Senatorial Campaign Committee, was named in so-called honoree payments of more than $1 million from lobbyists since 2008. Such honoree contributions are sent to groups associated with members of Congress or for events held in their honor.

Murray spokesman Matt McAlvanah said Thursday that the senator “has made a career out of standing up for working families and against special interests. And that’s reflected in her personal story, her votes and the policies she has championed.”

Already, even as the final appointments to the committee were announced Thursday, watchdog groups said the panel members will be under remarkable pressure from outside interests. Public Campaign, one such group in Washington, said establishing the committee “will make it cheaper for Wall Street, tax-dodging corporations and special-interest lobbyists to influence the spending cuts and revenue debate in Washington as the focus shifts to just 12 members of Congress.”

Bob Edgar, president of the advocacy group Common Cause, said that “with the public already disgusted with Washington in the wake of the debt-limit debacle, it’s vital that people have confidence that supercommittee members are thinking about the nation’s best interests, not positioning their party or worrying about how their decisions appear to donors.”

Public Campaign also called on Murray to step down immediately as head of the Democratic campaign committee.

The White House called such complaints “silly criticism.”

“Elected members of Congress are responsible: They take an oath, they are responsible to serve their constituents and their country,” White House Press Secretary Jay Carney told reporters this week. “We expect every member on the committee to take that responsibility seriously.”

Next on the Chopping Block — Gas Tax

Gas tax may be next Tea Party target

By Steve Hargreaves @CNNMoney August 8, 2011: 4:48 PM ET
Lawmakers may scrap the 18.4-cent-a-gallon federal levy when it expires next month. Can our roads really afford that?

NEW YORK (CNNMoney) — You may want to consider investing in some good shock absorbers for your car this fall.

Fresh from blocking any new tax increases during the debt ceiling debacle, some lawmakers in Congress may now oppose renewing the federal tax on gasoline and diesel fuel, which is used to maintain our nation’s highways.

The federal gas tax of 18.4 cents a gallon expires at the end of September. In order to keep the gas tax, lawmakers would need to vote to extend the highway funding bill, which is what the gas tax is tied to.

There are no official efforts to scrap the tax yet but as first noted in the journal Politco, momentum appears to be moving in that direction.

A bill was recently introduced by Senate Republicans that would allow states to opt out of the federal highway program. The highway program uses $32 billion each year collected by the gas tax, plus a handful of smaller fees and some borrowing to distribute some $50 billion a year to the states for road construction, maintenance and mass transit projects.

That represents about 28% of all road and transit spending nationwide, with the rest coming from states or towns in the form of tolls, registration and user fees, state gas taxes or their general funds.

Spendthrift motorists shouldn’t get too excited by the prospect of eliminating the federal gas tax, which costs the average driver around $100 a year. The states would presumably make up for the loss of federal funds by increasing their own gas tax or other driving-related fees.

But for those who support ending the federal levy, the thinking is that the states could do a better job of building and maintaining the nation’s infrastructure.

First there’s the bureaucracy. Why collect the money at the state level, send it to Washington, only to have it return to the states?

Then there’s the question of federal oversight. Federal money often requires the use of union labor or comes with other stipulations.

“The Davis-Bacon law increases the cost of new roads, bridges etc. by 25% to 33%,” Grover Norquist, head of the advocacy group Americans for Tax Reform, said referring to the law that stipulates how much workers on federal projects need to be paid. “Much money is siphoned off to pay union workers in subway systems or to build bike paths….not roads.”

About 15% of federal funds go toward mass transit and other things not road related, according to the Transportation Department.

Norquist didn’t say if he’ll use his considerable influence among Republicans to attempt to kill the gas tax next month, but did say “we should move now, or soon, to allow all states to raise and keep their own gas taxes to build and fix roads.”

Supporters of the tax argue federal involvement allows roads to be built and maintained to uniform standards that ensure the smooth and safe flow of travel and commerce.

Having a patchwork of roads with different weight limits, lane widths, or curvature would be a headache for truckers and possibly dangerous for everyone, said Ken Orski, publisher of the infrastructure industry publication Innovation NewsBriefs and a former transportation official in the Nixon and Ford administrations.

Even if states had to build the roads to a federal standard, Washington still acts as as a kind of equalizer when it comes to highway funding. Under the federal system, states on the coasts with large populations often end up sending money to states in the middle of the country that have thousand of miles of open roads but fewer taxpayers to help fund them.

That makes sense, said Orski, as the roads in the middle of the country take a beating by heavy trucks shipping commerce from one coast to the other.

“We are one nation, and we need a national highway system,” he said.

That helps explain why some big business groups not only want to keep the federal gas tax, but want it raised.

Both the Chamber of Commerce and General Motors (GMFortune 500) have recently come out in favor of a higher gas tax — the latter arguing for a dollar-a-gallon increase.

They note that the 18.4 cent-a-gallon tax hasn’t been raised since 1993, and now has the inflation-adjusted buying power of just 11 cents. Plus, fuel efficiency has been rising steadily each year along with miles driven, meaning Americans are putting more miles on roads while paying less to maintain them.

First Published: August 4, 2011: 12:29 PM ET