US Senate rejects gasoline tax holiday

The US Senate Thursday rejected a proposal to suspend the 18.4�/gal federal gasoline tax for 150 days. Sen. Kay Bailey Hutchison (R-Tex.), principal author of the gasoline tax proposal, said the amendment would use the federal budget surplus to replace the $1.5-1.8 billion/month in gasoline tax revenues that the Highway Trust Fund would have lost.


Washington, DC�The US Senate Thursday rejected a proposal to suspend the 18.4�/gal federal gasoline tax for 150 days. The Senate rejected the amendment 59-40 while considering �death tax� repeal legislation.

Sen. Kay Bailey Hutchison (R-Tex.), principal author of the gasoline tax proposal, said the amendment would use the federal budget surplus to replace the $1.5 to $1.8 billion/month in gasoline tax revenues that the Highway Trust Fund would have lost. Other sponsors of the bill were Spencer Abraham (R-Mich.), Peter Fitzgerald (R-Ill.), and Rod Grams (R-Minn.)

Hutchison argued that US consumers need short-term relief from sharply higher gasoline prices during the peak summer travel months, and that the federal government�s only option was to lift the gasoline tax.

Sen. Max Baucus (D-Mont.), speaking for the opposition, said the measure was unnecessary because gasoline prices are falling anyway. He said prices have dropped 28�/gal in the Midwest since June 19.

Baucus also said gasoline prices, when adjusted for inflation, are still a third less than they were in 1981.

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