While vowing to fight any tax increase proposals at federal and state levels, U.S. Chamber of Commerce President and Chief Executive Officer Thomas Donohue said the nation's largest business association is willing to back an increase in the fuel tax or a new carbon fee on industrial polluters, providing the monies are used to rebuild the nation's aging infrastructure.
The support for higher fuel taxes isn't without controversy, as logistic costs rose close to 10 percent in 2007, according to several plastics processors. But Donohue said it is time to revisit the issue, given the condition of roads and bridges and because the Highway Trust Fund is up for reauthorization in 2009.
``If we are going to address our infrastructure problems, we are going to have to take another look at user fees,'' he said in a Jan. 8 press briefing at the chamber's Washington headquarters. ``User fees are not a tax in the traditional sense. If you put more money into the system, you improve productivity by reducing bottlenecks. You reduce pollution.''
About a third of major U.S. roads and a fourth of its bridges are in poor or mediocre condition and the highway trust fund faces a potential $5 billion shortfall starting next year, according to chamber estimates.
``We have a physical infrastructure that is rapidly running out of capacity to efficiently move people, freight, fuel, power and information,'' Donohue said. ``The costs of this negligence can be measured in pollution, lost productivity and jobs. Something must be done.''
The fuel tax is 24.3 cents on diesel and 18.3 cents on gasoline. Donohue qualified chamber support for boosting the taxes, which have not been raised in 15 years.
``The outrageous practice of diverting infrastructure funds to other programs must end,'' he said. ``If we can figure out a way to have the user fees directed right to the heart of our infrastructure, you might be surprised at how supportive the chamber would be.''
He said the chamber will support proposals for a carbon tax under the same conditions. ``We wouldn't support a carbon tax unless we had the security and promise that it would be used for the infrastructure.''
In addition, Donohue said that the chamber will continue efforts to make education a top priority so U.S. companies have the workers they need to compete in a global economy. He said he hopes to convince congressional leaders to pass pending free trade agreements with Panama, Columbia and South Korea, and to negotiate others as well.
``We have a public education system with a dismal high school dropout rate of 30 percent,'' he said. ``We have severe shortages of scientists, engineers and technology workers, and crops rotting in the field because there is no one there to harvest them. We need seasoned workers and technology workers to keep companies from sending jobs out of the country,'' Donohue said.
``In the 21st century, the race for human talent will define the global winners and losers more than any other factor. Our educational problems are a threat to our economic security and intellectual capacity. ''
With regard to trade, he noted that nearly a third of our jobs are tied to global trade.
``Ninety-five percent of our customers live outside the United States,'' Donohue said. ``Yet today, we are being told that there should be no more trade agreements to open markets for American workers and businesses.''
But, on another area of trade concern - the artificially low level of the Chinese yuan - he warned that it would be ill-advised for Congress to pass legislation that adds currency manipulation to a list of unfair trade practices.
``China's change in currency ought to be evolutionary and we hope that they continue to move in the right direction,'' Donohue said.
``I hope Congress doesn't pass legislation that further complicates the issues, because you might see prices on Chinese goods go down so they can keep their people working.''