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June 18, 2014 12:15 PM, EDT

Senators Propose Raising Federal Motor Fuels Tax to Boost Trust Fund

Two senators on June 18 unveiled a plan aimed at boosting a federal highway account used by states to pay for infrastructure projects.

The government estimates that the Highway Trust Fund will run out of money in August.

Connecticut Democrat Chris Murphy and Tennessee Republican Bob Corker proposed increasing the federal motor fuels tax to shore up the trust fund.

Their proposal would increase the gas and diesel taxes by 6 cents each year for the next two years, for a total increase of 12 cents. The plan would be indexed to inflation, using  the Consumer Price Index.

American Trucking Associations President Bill Graves praised the Murphy-Corker plan, noting that it would “put the Highway Trust Fund on the path to solvency and provide the revenues we need to maintain a 21st-century transportation network.”

Murphy told reporters the “time for some political courage” is at hand to resolve the looming shortfall, but it is unclear how far the senators’ proposal would advance in the Senate.

Tax policy writers in the chamber are expected to unveil a proposal to shore up the trust fund. Most observers expect that plan to consist of a transfer of funds from the U.S. Treasury. Meanwhile, Senate Democratic leaders have opposed a House Republican plan calling for using savings from eliminating most Saturday mail to finance a one-year extension of the trust fund. 

In December, Rep. Earl Blumenauer (D-Ore.), a member of the House Budget Committee, offered legislation aimed at raising the tax from 18.4 cents per gallon to 33.3 cents per gallon by 2016, then indexing it to inflation. His legislation lacks broad support.

Congress has not raised taxes on gasoline and diesel fuel since 1993. The tax on gas is 18.4 cents per gallon and the diesel tax is 24.4 cents per gallon.

The Department of Transportation has projected the highway account of the Highway Trust Fund could dip below the critical $4 billion funding level as early as July.