According to the Simpson-Bowles proposal, the gas tax increase should be "dedicated to fully fund the transportation trust funds and therefore eliminating the need for further general fund bailouts."
The bipartisan debt commission was created by President Obama in February with the charge to identify policy improvements that will improve the nation's fiscal situation. The commission is scheduled to release a report in December that is expected to include recommendations on balancing the budget by 2015.
Last week, U.S. Sens. Tom Carper (D-Delaware) and George Voinovich (R-Ohio) went on record in support of a 25 cents-per-gallon increase in the federal tax on gasoline and diesel fuel. In a Nov. 5 letter to President Barack Obama's National Commission on Fiscal Responsibility and Reform, the senators suggested increasing the gas tax by one cent per month for 25 months, which would raise an estimated $270 billion over five years. The senators suggest dedicating 10 cents of the increase in gasoline tax to debt reduction ($83 billion over five years) with the rest being directed to support a new surface transportation authorization bill.
The letter states, "This proposal will fix the transportation program's major fiscal challenges. It will remove the approaching need for further General Fund transfers to the Highway Trust Fund, will provide additional deficit reduction, will supply essential investment for transportation infrastructure and will create more than 750,000 jobs."
The Simpson-Bowles draft proposal makes five basic recommendations for reducing the federal deficit:
The plan also claims to achieve nearly $4 trillion in deficit reduction through 2020 and to reduce the federal deficit to 2.2% of GDP by 2015, exceeding President Obama's goal of primary balance (about 3% of GDP).