Skip to: Content
Skip to: Site Navigation
Skip to: Search


December 26, 1980



The American motorist will have plenty of incentive to drive less in 1981. Decontrol of domestic oil is likely to raise gasoline prices 7 or 8 cents a gallon. And pressure is mounting for an increase in the federal gasoline tax.

Skip to next paragraph

The tax is 4 cents a gallon, but that is not enough to sustain current federal spending on highways. The Highway Trust Fund was more than $1.5 billion in the red in fiscal 1980 and had to draw on reserves. Revenues are dropping because of lower gasoline consumption.

Some legislators favor raising the tax by 2 or 3 cents. Others talk of indexing the tax to rise at the rate of inflation. Another option would be to sharply cut highway spending.

No one is sure what approach President-elect Reagan will take. But the program will grind to a halt unless action is taken soon.m