UNITED STATES

Biden to call for 3-month suspension of gas and diesel taxes

Jun 22, 2022, 9:14 AM | Updated: 12:03 pm
FILE - High gas prices are shown as a pedestrian waits to cross the street in Los Angeles, June 16,...
FILE - High gas prices are shown as a pedestrian waits to cross the street in Los Angeles, June 16, 2022. President Joe Biden on June 22 will call on Congress to suspend the federal gasoline and diesel taxes for three months. It's a move meant to ease financial pressures at the pump that also reveals the political toxicity of high gas prices in an election year.(AP Photo/Jae C. Hong, File)
(AP Photo/Jae C. Hong, File)

President Biden speaking live now:

 

WASHINGTON (AP) — President Joe Biden on Wednesday will call on Congress to suspend federal gasoline and diesel taxes for three months — a move meant to ease financial pressures at the pump that also reveals the political toxicity of high gas prices in an election year.

The Democratic president will also call on states to suspend their own gas taxes or provide similar relief, the White House said.

At issue is the 18.4 cents-a-gallon federal tax on gas and the 24.4 cents-a-gallon federal tax on diesel fuel. If the gas savings were fully passed along to consumers, people would save roughly 3.6% at the pump when prices are averaging about $5 a gallon nationwide.

The Utah angle:  Calls for ‘gas tax holiday’ grow, but some analysts think it’s a bad idea

But many economists and lawmakers from both parties view the idea of a gas tax holiday with skepticism.

Barack Obama, during the 2008 presidential campaign, called the idea a “gimmick” that allowed politicians to “say that they did something.” He also warned that oil companies could offset the tax relief by increasing their prices.

Biden energy adviser Amos Hochstein pushed back on Wednesday, saying consumers could save about 50 cents per gallon if Congress and the states heed the president’s call.

“That’s not a gimmick,” Hochstein, senior adviser for global energy security at the State Department, said on CNN. “That’s a little bit of breathing room for the American people as we get into the summer driving season.”

It was not immediately clear if the White House has the votes in Congress to suspend the federal tax.

High gas prices pose a fundamental threat to Biden’s electoral and policy ambitions. They’ve caused confidence in the economy to slump to lows that bode poorly for defending Democratic control of the House and the Senate in November.

Biden’s past efforts to cut gas prices — including the release of oil from the U.S. strategic reserve and greater ethanol blending this summer — have done little to produce savings at the pump, a risk that carries over to the idea of a gas tax holiday.

Biden has acknowledged how gas prices have been a drain on public enthusiasm when he is trying to convince people that the U.S. can still pivot to a clean-energy future. In an interview with The Associated Press last week, Biden described a country already nursing some psychological scars from the coronavirus pandemic that is now worried about how to afford gas, food and other essentials.

“If you notice, until gas prices started going up,” Biden said, “things were much more, they were much more optimistic.”

The president can do remarkably little to fix prices that are set by global markets, profit-driven companies, consumer demand and aftershocks from Russia’s invasion of Ukraine and the embargoes that followed. The underlying problem is a shortage of oil and refineries that produce gas, a challenge a tax holiday cannot necessarily fix.

Mark Zandi, chief economist at Moody’s Analytics, estimated that the majority of the 8.6% inflation seen over the past 12 months in the U.S. comes from higher commodity prices due to Russia’s invasion and continued disruptions from the coronavirus.

“In the immediate near term, it is critical to stem the increase in oil prices,” Zandi said last week, suggesting that Saudi Arabia, the United Arab Emirates and a nuclear deal with Iran could help to boost supplies and lower prices. Republican lawmakers have tried to shift more blame to Biden, saying he created a hostile environment for domestic oil producers, causing their output to stay below pre-pandemic levels.

Senate Republican leader Mitch McConnell mocked the idea of a gas tax holiday in a February floor speech. “They’ve spent an entire year waging a holy war on affordable American energy, and now they want to use a pile of taxpayers’ money to hide the consequences,” he said.

Democratic House Speaker Nancy Pelosi has previously expressed doubts about the value of suspending the federal gas tax.

Administration officials said the $10 billion cost of the gas tax holiday would be paid for and the Highway Trust Fund kept whole, even though the gas taxes make up a substantial source of revenue for the fund. The officials did not specify any new revenue sources.

The president has also called on energy companies to accept lower profit margins to increase oil production and refining capacity for gasoline.

This has increased tensions with oil producers: Biden has judged the companies to be making “more money than God.” That kicked off a chain of events in which the head of Chevron, Michael

Wirth, sent a letter to the White House saying that the administration “has largely sought to criticize, and at times vilify, our industry.”

Asked about the letter, Biden said of Wirth: “He’s mildly sensitive. I didn’t know they’d get their feelings hurt that quickly.”

Energy companies are scheduled to meet Thursday with Energy Secretary Jennifer Granholm to discuss ways to increase supply.

 

Today’s Top Stories

United States

President Joe Biden speaks during a news conference on the final day of the NATO summit in Madrid, ...
DARLENE SUPERVILLE and ZEKE MILLER Associated Press

Biden says transatlantic alliance has adapted to new threats

Biden's comments came at a press conference in Madrid at the conclusion of the annual meeting of NATO leaders and after he attended a summit with the Group of Seven advanced democratic economies in the Bavarian Alps.
2 days ago
A Rite Aid logo is displayed on its store...
HALELUYA HADERO, AP Reporter

Amazon, Rite Aid cap purchase of emergency contraceptives

Retailers limiting purchases is standard practice that helps retailers prevent stockpiling and reselling at higher prices.
2 days ago
New York Gov. Kathy Hochul stands with Lieutenant governor Antonio Delgado during their primary ele...
STEVE PEOPLES AP National Politics Writer

Takeaways from first primaries since Roe v. Wade overturned

The abortion debate consumed the nation this week, but there was no race where it mattered more than Colorado's Republican primary for the U.S. Senate, where businessman Joe O'Dea became one of the only abortion-rights-supporting Republicans in the nation to win a statewide primary this year.
3 days ago
Freshly pressed vinyl records are produced in a stamper at the United Record Pressing facility Thur...
DAVID SHARP Associated Press

Manufacturers struggle to keep pace with vinyl record demand

The Recording Industry Association of America says record album sales grew 61% last year — and reached $1 billion for the first time since the 1980s.
5 days ago
U.S. Representative Adam Kinzinger (R-IL) speaks during the fifth of eight planned public hearings ...
Annie Grayer, CNN

January 6 committee unexpectedly adds new hearing for Tuesday

The announcement came as a surprise to many as the committee had said it was not going to resume its hearings until mid-July.
5 days ago
Bodycam footage from the Moab Police Department that shows them talking with Brian Laundrie is seen...
Jamiel Lynch and Chenelle Woody, CNN

Lawyer releases pages from Brian Laundrie’s notebook in which he admits to killing Gabby Petito

Eight pages of Brian Laundrie's notebook were released Friday by the Laundrie family attorney. The notebook was found near Brian Laundrie's remains.
8 days ago

Sponsored Articles

Tax Harassment...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
Prescription opioids can be disposed of during National Prescription Take Back Day...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
national heart month...
Intermountain Healthcare

National Heart Month: 5 Lifestyle Changes to Make Today to Keep You Heart Healthy

Heart disease is the leading cause of death for both men and women. One person dies every 36 seconds in the United States from cardiovascular disease
Joseph Smith Memorial Building...
Temple Square

The Joseph Smith Memorial Building is an icon of Salt Lake City | Why hosting an event at this beautiful location will make you a hero this year

Here's why hosting an event at the iconic Joseph Smith Memorial Building in downtown Salt Lake City will make you a hero this year.
Biden to call for 3-month suspension of gas and diesel taxes