• With: Rep. Tom Graves, R-Ga.

    This is a rush transcript from "Your World," February 21, 2012. This copy may not be in its final form and may be updated.

    STUART VARNEY, GUEST HOST: To the congressman who wants to ease your pain at the pump by slashing the federal gas tax. But how would our roads and bridges be paid for them?

    Republican Georgia Congressman Tom Graves joining us now.

    Sir, if you -- the current gas tax federal level is 18.4 cents a gallon, I do believe, and you want to cut that all the way down.

    So, tell me, how would you fund highways and bridges at the federal level if you cut that tax way back?

    REP. TOM GRAVES (R), GEORGIA: Well, really, what this is all about is we’re reauthorizing the transportation funding model. So we need to rethink it.

    We need a 21st century solution to a 20th century problem. And if you think back, 1956 is when this excise tax was created, and it had a purpose of building the interstate system. And it was intended for only 15 years, and then it was to ratchet down to 1.5 cents per gallon.

    But of course, now, as you just mentioned, it’s 18.4. My solution is simple. Let’s agree with what they discussed early on in the ‘50s. And that is, after 15 years, it’s done, mission complete. Let’s devolve it back to the states and allow the states to impose their own taxes...

    VARNEY: Oh, OK.

    GRAVES: ... and to -- and focus on their own priorities.

    And here’s why it’s so important. Take the state of Georgia. We have paid now in over more than $800 million over the last transportation cycle, the last five years, more in taxpayer dollars than we’ve received back as a state. And there are 27 other states like us, and it goes to fund the bureaucracy of the Transportation Department that’s sent out across the United States.

    It’s that distribution of our tax dollars that are taken from us. So it’s just a different idea, a different solution that empowers the states, instead of the government.

    VARNEY: Of course, your opponents would say, wait a second, we don’t want to reduce gas -- we don’t want to increase gasoline consumption by lowering the price. We want to reduce gas consumption because we’re worried about CO2 emissions. Now, do they have a point?

    GRAVES: Well, you know, first of all, I’m a -- I’m a free market capitalist. I believe the consumers are going to determine which energy that is best for them.

    And right now, fossil fuel and oil is something that is out in the market that people are enjoying, they’re using. They’re driving their vehicles. We don’t need to discourage that or manipulate the marketplace. Instead, we need to lower the prices, which means more competition, more access to resources.

    It’s something my children are learning in elementary school and middle school right now. And that’s simple economics, supply and demand.

    VARNEY: Let me ask you a question about Georgia. If you cut away or cut back the 18.4 cent federal tax at the moment, what would Georgia’s tax be? How many cents per gallon? Any rough idea?

    GRAVES: Well, if you were to keep it on the same model of funds they receive today from the federal government; it would be less than 18.4 cents, because they’re receiving about 89 to 91 percent of everything that’s taken from the taxpayers of Georgia.

    That’s all they get back, is 89 to 91 cents on the dollar.

    VARNEY: Well, it would be a lot less? Could you bring it down like...?

    GRAVES: It could be considerably less.

    Here’s what’s even fascinating -- more fascinating about this, is you have all the mandates that come from the federal government. Really, only 50 percent of all excise tax dollars go to construction of roads and bridges. The rest of it is to a lot of other mandated programs, whether bike paths or planting bushes or walking paths, a lot of other things.

    Georgia could determine what their priorities are and spend it where they think is best, as well as every other state.

    VARNEY: OK. Congressman -- Congressman Tom Graves, Republican Georgia, you’re the man with the plan, and we hear you.

    Thanks very much, sir. Appreciate it.

    GRAVES: Thanks, Stuart.

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