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Obama proposes new oil tax to fund clean transportation

Updated: 2016-02-05 09:25

WASHINGTON -- US President Barack Obama will require oil companies to pay 10 US dollars for every barrel of oil in his budget plan to be released next week, as part of efforts to create a cleaner, more sustainable transportation system, the White House said Thursday.

Republicans in the US Congress reacted promptly to Obama's proposal for the oil tax, vowing to kill what they called an "absurd" idea.

According to the White House, Obama's plan "would increase American investments in clean transportation infrastructure by roughly 50 percent while reforming the investments we already make to help reduce carbon pollution, cut oil consumption, and create new jobs."

The new oil fee, if approved by the Congress, would be gradually phased in over five years, the White House said in a statement.

The so-called 21st Century Clean Transportation Plan included a proposal of spending nearly 20 billion dollars per year above current funding levels to "enhance transportation options for American families."

That would include making high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev, the White House said.

Obama's plan also proposed 10 billion dollars per year to encourage local and state governments to plan, design and build smarter, cleaner, more resilient transportation systems.

Finally, Obama called for more than 2 billion dollars in annual investments in clean transportation research and development, including efforts to launch pilot deployments of safe and climate smart autonomous vehicles, create regional fueling infrastructure for low-carbon vehicles, and integrate new and changing technologies into US transportation system.

The near-term prospects for Obama's plan are basically nil, as the Republicans who control the Congress won't agree to such tax increases.

Unsurprisingly, House Majority Whip Steve Scalise called Obama's plan "absurd" and pronounced it "dead on arrival" in the House of Representatives.

"From day one of President Obama's Administration, he has waged open warfare on American energy and his radical policies have cost jobs while increasing costs on hard-working families," Scalise said in a statement.

"The House will kill this absurd proposal, and instead focus on lowering costs and growing our economy," he said.

President and CEO Jack Gerard of American Petroleum Institute, which represents US oil and natural gas firms, accused Obama of doing things that make the US less competitive on his way out of office.

"The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America's emergence as a global energy leader," Gerard said.

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