Mileage tax a "practical option," budget analysts tell Congress

Cars form a long line in front of a gas station in Tamura, northern Japan, Monday, March 14, 2011. Millions of Japanese were without drinking water or electricity Sunday, surviving on instant noodles and rice balls, two days after a powerful earthquake and tsunami hammered the northeastern coast. (AP Photo/Kyodo News) JAPAN OUT, MANDATORY CREDIT, NO SALES IN CHINA, HONG KONG, JAPAN, SOUTH KOREA AND FRANCE
Freeway Traffic Might Be Making Your Kid Sick

The Obama administration wants to spend $556 billion over the next six years on transportation projects, but they may have to get creative to pay for them. One "practical option" could be taxing drivers based on their mileage, the nonpartisan Congressional Budget Office (CBO) is reporting.

The CBO has released a report on a potential mileage tax at the behest of Democratic Sen. Kent Conrad (N.D.), the chairman of the Senate Budget Committee, the Hill reports. While tracking mileage was once considered infeasible, the CBO concluded that new technologies have changed that.

"Now, electronic metering and billing are making per-mile charges a practical option," the report said.

Conrad requested the report after a congressional hearing earlier this month in which he asked Transportation Secretary Ray LaHood about funding federal transportation projects, according to the Hill.

"Do we do gas tax?" Conrad asked. "Do we move to some kind of an assessment that is based on how many miles vehicles go, so that we capture revenue from those who are going to be using the roads who aren't going to be paying any gas tax, or very little, with hybrids and electric cars?"

In response, LaHood told Conrad that instituting more tolling on roads was an option in some states. However, he added that "the president has made it clear that he's not in favor of raising the gas tax when we have 9 percent unemployment in this country."

In fact, LaHood suggested a mileage tax in 2009, but President Obama promptly rejected the idea. "It is not and will not be the policy of the Obama administration," then-White House Press Secretary Robert Gibbs said with respect to the mileage tax.

Fuel taxes and energy policies in general have been a hot topic of debate as high gas prices continue to strain drivers' budgets.

This morning at the Iowa Renewal Project, an event hosted by the American Family Association, Mississippi Gov. Haley Barbour charged that "the energy policy of the Obama administration is to increase the cost of energy so Americans will use less of it."

The potential GOP presidential nominee continued, "Their goal is to reduce pollution. That's an environmental policy, not an energy policy."