The White House is evaluating a variety of ways – including a vehicle mileage charge – to finance what are expected to be multi-trillion dollar infrastructure proposals, Transport Secretary Pete Buttigieg said on Friday.
Buttigieg, who spoke with CNBC’s Kayla Tausche, also argued that President Joe Biden’s next plans to rebuild roads, bridges and waterways in the United States would lead to a net gain for the American taxpayer, not a net disbursement.
“When you think about infrastructure, it’s a classic example of the type of investment that has a return on that investment,” he said. “This is one of the many reasons why we think this is so important. This is a vision of jobs, as much as it is an infrastructure vision, a climate vision and more.”
He also considered several potential revenue-generating options to finance the project. He spoke fondly of a mileage charge, which would tax travelers based on the distance they travel, rather than the amount of gas they consume.
Democrats have slowly moved away from the gas tax amid a simultaneous, climate-friendly effort to encourage consumers to drive electric cars.
Pete Buttigieg speaks at the Senate of Commerce, Science and Transport nomination hearings to examine his likely appointment as Secretary of Transportation in Washington.
Ken Cedeno | Reuters
“I am hearing a lot of appetite to ensure that there are sustainable financing flows,” said the transport secretary. A mileage fee “looks very promising if we believe in the so-called user-pays principle: the idea that part of how we pay for roads you pay based on how much you drive.”
The transport secretary’s comments came at a time when President Joe Biden is preparing to detail comprehensive infrastructure proposals that could cost $ 3 trillion to $ 4 trillion during a trip to Pittsburgh next week.
In his first press conference for his presidency, Biden said on Thursday that rebuilding the U.S. physical and technological infrastructure was his next priority, critical not only for efforts to restore the economy, but also to remain competitive with rivals such as China.
Buttigieg added on Friday that the White House is considering a revival of Build America Bonds, a special class of municipal bonds first introduced in the Obama administration with interest costs financed by the U.S. Treasury.
The BABs show “many promises in terms of how we leverage this type of financing. Ideas have also come up around things like a national infrastructure bank.”
His remarks on Friday came a day after he begged Congress on Thursday to make a “generational investment” to improve the country’s roads, bridges and waterways and combat climate change and racial inequality.
“There is an almost universal recognition that a broader recovery will require a national commitment to repair and transform America’s infrastructure,” Buttigieg told the Chamber’s Transport and Infrastructure Committee.