Factory Group Opposes Energy Taxes for Transport

The National Association of Manufacturers, a major industrial lobbying group in Washington, D.C., launched an advertising campaign to head off new energy taxes after Obama administration officials suggested such taxes could pay for its transportation plans.

The group said it will pay for a "multi-state, multi-million-dollar" ad effort and drew a link directly to President Obama's proposal on Labor Day to seek congressional approval for an initial $50 billion investment in transport infrastructure projects as the down payment on a six-year overhaul of federal transportation spending programs.

The NAM said its ad launch "comes days after the Obama administration's announcement of a $50 billion infrastructure proposal that White House officials say could be offset by new taxes on the energy sector. A new tax increase on businesses will not help spur job creation or economic growth for our economy."

Transportation industry groups all that the Highway Trust Fund needs more money to cover its long-term project costs, through hikes in its dedicated taxes or other revenue sources. Most have said they support increases in the federal motor fuel taxes that already support that trust fund, which are seen as fees on users of the infrastructure.

However, Transportation Secretary Ray LaHood and other administration officials have consistently said the president opposes raising fuel taxes in a weak economy, and some Republican members of Congress have vowed to fight any gas tax hikes. So when Obama proposed his new spending plan on Sept. 6 as a job creation measure, the White House said it would work with Congress to find ways to pay for it. But some Obama aides reportedly said they were eyeing new taxes or removal of some tax breaks for oil and gas companies to raise the needed revenue.

That has split some of the Washington-based trade groups that see such taxes on companies as unacceptable, even if they have supported boosting transportation spending. Some transport industry officials privately say they would support the oil company taxes, while others say it could be a deal breaker. In particular, groups whose members include energy companies are angry over the proposal, and the NAM has a number of energy companies represented on its board.