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Biden to Urge Gasoline Tax Pause With Prices Weighing on Party

Commodities Jun 22, 2022 08:36AM ET
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© Bloomberg. Joe Biden Photographer: Ting Shen/Bloomberg

(Bloomberg) -- President Joe Biden will ask Congress to enact a three-month gasoline tax suspension, after his administration’s previous efforts failed to curb soaring pump prices that weigh heavily on his party’s political fortunes.

Biden will call for a pause in tax collections through September in a speech scheduled for 2 p.m. Wednesday in Washington, senior administration officials said. The national average gasoline price hit a record this month above $5 a gallon, even after Biden issued a historic release from US reserves earlier this year.

As part of any suspension, Biden wants to reallocate other federal funding to make up the estimated $10 billion hit to the Highway Trust Fund, which is supported primarily by gas taxes, according to the officials. They asked not to be identified as a condition of participation in a briefing for reporters.

Biden will ask that both the 18-cent-per-gallon federal tax on gasoline and the 24-cent-per-gallon tax on diesel be suspended, the officials said.

Gasoline prices, a key driver of inflation that’s hit a four-decade high, have emerged as Biden’s foremost political problem as Democrats face losing control of one or both chambers of Congress in the November midterms. 

It’s unlikely Congress will heed the president and enact a gasoline tax holiday. Republicans, who control 50 seats in the Senate, are making Biden’s economic policy and his failure to curb gasoline prices and broader inflation the centerpiece of their midterm campaign. And some Democrats oppose waiving the tax out of concern the policy would undermine highway maintenance.

And House Speaker Nancy Pelosi and others have questioned whether a holiday would result in lower prices for consumers at the gas pump. 

But some states have already moved to relieve motorists of gas taxes. The governors of Connecticut and New York have suspended their state taxes, while the governors of Illinois and Colorado have delayed planned tax and fee increases.

Connecticut’s gas tax holiday ends this month, while New York’s began June 1 and will extend for seven months.

In his speech, the president also will call on refiners and retailers to funnel through more savings to consumers, the officials said, the latest salvo in his brewing feud with the oil sector, which he blames for price gouging and for doing too little to maintain refining capacity in the US.

On Tuesday, Biden rebuked the chief executive of Chevron Corp. (NYSE:CVX), Mike Wirth, after Wirth published a letter calling for Biden to stop criticizing the industry and make a “change in approach” to US energy policy. Biden told reporters, “I didn’t know they’d get their feeling hurt that quickly.” 

Read more: Biden Escalates War of Words With Big Oil Ahead of Talks

But Biden’s administration believes that if enacted, a holiday would cut the price of gas by roughly a dollar a gallon, the officials said. The estimate includes federal gas taxes, an average of state taxes and a scenario in which refiner profit margins return to levels comparable to eras in which crude oil was less expensive.

Biden said earlier this week he was studying whether to back suspension of the 18.4 cents-per-gallon federal gasoline tax. 

How the ‘Energy Shock’ Has Upended the Global Economy: QuickTake

On Tuesday, Biden and a top economic aide downplayed concerns often cited in opposing a gas tax holiday -- that it would curb revenues needed to maintain roadways, or that savings wouldn’t be passed on to consumers. Biden said last year’s infrastructure law can fill the gap on funding, while adviser Heather Boushey said state-level pauses already in place signal that consumers do benefit.

“We have a giant infrastructure bill we passed -- giant,” Biden said, referring to the infrastructure law last year that added $550 billion in new funding for construction of roads, airports, ports and other public works. “It’s not like before. Look, it will have some impact but it’s not going to have an impact on major road construction and major repairs.”

 

©2022 Bloomberg L.P.

Biden to Urge Gasoline Tax Pause With Prices Weighing on Party
 

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Comments (7)
Notvery Goodathis
Peteymcletey Jun 22, 2022 11:20AM ET
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Anyone blaming Republicans is stupid given you don't need a single vote from them to pass anything.
DIAS YOUTUBE
DIAS YOUTUBE Jun 22, 2022 9:42AM ET
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great news
Pavan Patel
Pavan Patel Jun 22, 2022 9:42AM ET
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Lmao how?
Crypto Current
Crypto Current Jun 22, 2022 9:20AM ET
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hahaha really? do Biden understand bid-ask of oil markets? 200$/bbl on two months...
Thomas Simpson
Thomas Simpson Jun 22, 2022 9:16AM ET
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Obama called that move a gimmick.
Ming Li
Ming Li Jun 22, 2022 9:10AM ET
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Where is AOC? Remember she has told us we had 12 years to ban fossil fuel or the earth would be totally destroyed, right?
James Pattison
James Pattison Jun 22, 2022 9:10AM ET
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Shes been saying it for the last 20 yrs
John Hat
John Hat Jun 22, 2022 9:06AM ET
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#EchoChamberLiberals will think Biden is really trying.
James Pattison
James Pattison Jun 22, 2022 8:54AM ET
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Or you could bring back the pipeline… make it easier to get permits and leases on oul rich ground here in the us… and stop screwing the middle class and lower wage earners
 
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