NATIONAL NEWS

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

Jun 22, 2022, 5:26 AM
FILE: Brie Olootu pumps gas at an Exxon Mobil gas station on June 09, 2022 in Houston, Texas. Gas p...
FILE: Brie Olootu pumps gas at an Exxon Mobil gas station on June 09, 2022 in Houston, Texas. Gas prices are breaching record highs as demand increases and supply fails to keep up. There are now over 10 states where the average price of gasoline is $5 a gallon or higher. (Photo by Brandon Bell/Getty Images)
(Photo by Brandon Bell/Getty Images)

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.

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.

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.

KSL 5 TV Live

Top Stories

National News

NASA's first spacecraft designed to study a metallic asteroid won't be launching this year as plann...
Ashley Strickland, CNN

NASA’s Psyche mission to an unexplored metal world comes to a halt

NASA's first spacecraft designed to study a metallic asteroid won't be launching this year as planned, according to an announcement made by the agency on Friday.
19 hours ago
Meeting of Ukrainian President Volodymyr Zelenskyy with representatives of foreign media. (Ukrainia...
Associated Press

NOT REAL NEWS: A look at what didn’t happen this week

A roundup of some of the most popular but completely untrue stories and visuals of the week. None of these are legit, even though they were shared widely on social media. The Associated Press checked them out. Here are the facts
19 hours ago
FILE PHOTO (Photo by Jacob King - WPA Pool/Getty Images)...
MIKE STOBBE, AP Medical Writer

Moderna COVID-19 shots now an option for older kids in US

There is now a second COVID-19 option for kids ages 6 to 17 in the U.S.
19 hours ago
Abortion-rights and Anti-Abortion rights activists fill first street in front of the U.S. Supreme C...
Cindy St. Clair

How abortion laws will change in states surrounding Utah

The Supreme Court opinion in Dobbs v. Jackson Women’s Health allows states to reshape abortion laws. Utah’s trigger law will restrict abortion in most cases. Here’s a look at what laws will look like in surrounding intermountain states.
19 hours ago
A United Airlines plane lands at San Francisco International Airport on March 07, 2022 in San Franc...
DAVID KOENIG, AP Airlines Writer

Pilots in line for big raises amid global travel disruptions

The largest pilots union has approved a contract that would boost the pay of pilots at United Airlines by more than 14% over the next 18 months, potentially clearing the way for similar wage hikes throughout the industry.
19 hours ago
In 1991, when actor Mila Kunis moved to the United States, her family left their home in what was t...
Gabriel Kinder, CNN

Mila Kunis responds to the war in Ukraine by raising millions of dollars to aid those who are suffering

In early March, Mila Kunis and her husband, Ashton Kutcher, launched Stand With Ukraine, with the goal of raising $30 million. To date, the campaign has raised more than $36 million, and more than 75,000 people have donated.
19 hours ago

Sponsored Articles

hand holding 3d rendering mobile connect with security camera for security solutions...
Les Olson

Wondering what security solutions are right for you? Find out more about how to protect your surroundings

Physical security helps everyone. Keep your employees, clients, and customers safe with security solutions that protect your workplace.
Many rattan pendant lights, hay hang from the ceiling.Traditional and simple lighting....
Lighting Design

The Best Ways to Style Rattan Pendant Lighting in Your Home

Rattan pendant lights create a rustic and breezy feel, and are an easy way to incorporate this hot trend into your home decor.
Earth day 2022...
1-800-GOT-JUNK?

How Are You Celebrating Earth Day 2022? | 4 Simple Ways to Celebrate Earth Day and Protect the Environment

Earth Day is a great time to reflect on how we can be more environmentally conscious. Here are some tips for celebrating Earth Day.
Get Money Online...

More Ways to Get Money Online Right Now in Your Spare Time

Here are 4 easy ways that you can get more money online if you have some free time and want to make a little extra on the side.
Lighting trends 2022...

Lighting Trends 2022 | 5 Beautiful Home Lighting Trends You Can Expect to See this Year and Beyond

This is where you can see the latest lighting trends for 2022 straight from the Lightovation Show at the Dallas World Trade Center.
What Can't You Throw Away in the Trash...

What Can’t You Throw Away in the Trash? | 5 Things You Shouldn’t Throw in to Your Trash Can

What can't you throw away in the trash? Believe it or not, there are actually many items that shouldn't be thrown straight into the trash.
Biden to call for 3-month suspension of gas and diesel taxes