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Biden asks Congress for gas tax holiday to lower record pump prices

Commodities Jun 23, 2022 04:51AM ET
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2/2 © Reuters. FILE PHOTO: Gasoline prices are displayed at an Exxon gas station behind American flag in Edgewater, New Jersey, U.S., June 14, 2022. REUTERS/Mike Segar/File Photo 2/2

By Jarrett Renshaw and Nandita Bose

WASHINGTON (Reuters) -U.S. President Joe Biden on Wednesday called for a three-month suspension of the federal gasoline tax to combat record prices, but opposition from lawmakers within his own party suggests the request may never be met.

American families paying much more for gasoline deserve some financial relief, Biden said as he pushed Congress to act, while commenting that a suspension of the 18.4 cents per gallon tax was not enough.

"I fully understand that a gas tax holiday alone is not going to fix the problem but it will provide families some immediate relief, just a little bit of breathing room, as we continue working on bringing down prices for the long haul," Biden said.

The president also urged states to temporarily suspend state fuel taxes, which are often higher than federal rates.

He is also asking major oil companies to suggest ideas on how to bring back idled refining capacity when they meet with Energy Secretary Jennifer Granholm on Thursday.

Biden and his advisers face increasing pressure to act as record-high gas prices and overall inflation weigh on the president's opinion poll ratings and cast doubt on Democrats' chances of retaining congressional power in Nov.8 elections.

The administration says the main causes of high prices are the impact of Russia's invasion of Ukraine in February and oil companies reaping sky-high profits as gasoline demand rises with the worst of the COVID-19 pandemic apparently over. Oil companies complain that Biden's administration is unfairly vilifying the industry.

A gas tax holiday is unlikely to lower overall inflation rates, some economists said, and could threaten to undermine Biden's clean-energy and infrastructure goals.

A suspension of the 18.4 cents per gallon federal gasoline tax and 24.4 cent diesel tax would require congressional action.

LAWMAKERS OPPOSED

Lawmakers in both parties have expressed resistance to suspending the tax. Some Democrats, including House of Representatives Speaker Nancy Pelosi worry oil companies and retailers may pocket much of the savings.

"We will see where the consensus lies on a path forward for the President's proposal in the House and the Senate," Pelosi said in an unusually lukewarm statement about a White House action.

Peter DeFazio, a Democrat who chairs the House Committee on Transportation and Infrastructure, said a federal gas tax holiday would provide "miniscule relief" and deplete needed infrastructure funds.

Energy secretary Granholm told reporters a "conversation is ongoing" with Capitol Hill.

She said she would use a meeting with oil companies on Thursday to press them for answers about what can be done to increase the supply and lower the cost of gasoline, as well as to "ensure that they would pass" gas tax savings on to consumers.

Biden asked Congress to suspend the fuel tax through September to alleviate prices during the United States' summer driving season. The move will cost the Highway Trust Fund roughly $10 billion in forgone revenue, but could be made up from other areas of a budget as tax revenues grow and deficits shrink emerging from the pandemic.

Some states, such as New York and Connecticut, have already paused state fuel taxes, while others have floated ideas such as consumer rebates and direct relief.

Refiners are struggling to meet global demand for diesel and gasoline, exacerbating high prices and aggravating shortages.

"Pausing the federal gas tax will certainly provide near-term relief for U.S. drivers, but it won’t solve the root of the issue – the imbalance in supply and demand for petroleum products," a spokesperson for the American Fuel and Petrochemical Manufacturers industry group said.

Longer-term policies are still needed to boost U.S. energy production, it said.

U.S. pump prices are averaging near $5 a gallon as soaring demand for motor fuels coincides with the loss of about 1 million barrels per day of processing capacity. In the last three years many plants were closed when fuel demand cratered at the height of the pandemic.

Biden said he understands the politics around Republicans seizing on high gas prices ahead of the elections, but he asked his rivals whether they instead would've chosen not to support Ukraine.

"So for all those Republicans in Congress criticizing me today for high gas prices in America: Are you now saying we were wrong to support Ukraine? Are you saying we were wrong to stand up to Putin? Are you saying that we would rather have lower gas prices in America and Putin's iron fist in Europe? I don't believe that," Biden said.

Biden asks Congress for gas tax holiday to lower record pump prices
 

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Comments (10)
Francis Lim Wei
Francis Lim Wei Jun 23, 2022 1:28AM ET
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for god's sake bring the crude oil prices down !!!
Jamie Kent
Jamie Kent Jun 22, 2022 6:17PM ET
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He shot us in the foot, now he wants to give us a band-aide
Abc Xyz
Abc Xyz Jun 22, 2022 5:05PM ET
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Instead of tax holiday, he should ask congress to impeach himself.
Jamie Kent
Jamie Kent Jun 22, 2022 5:05PM ET
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I don't believe the current VP would do any better....too bad they both can't be impeached at the same time.
Francis Lim Wei
Francis Lim Wei Jun 22, 2022 5:05PM ET
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I think America needs a new president
Gary Moses
Gary Moses Jun 22, 2022 5:05PM ET
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Francis Lim Wei ha ha , you have 2.5 more yrs to complain.
Matthew Petyk
Matthew Petyk Jun 22, 2022 4:59PM ET
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So the average American will save about as much $ to buy a Pizza and drink. Ad Biden begs other countries to pump more oil... And we have the resources, tech, and talent to do it right here... but Biden makes it so difficult to do so. Yes. Yes he does.
Samantha
Samantha Jun 22, 2022 3:29PM ET
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Prices stabilize when production meets demand. Prices fall when production exceeds demand. Prices go up when production is lower than demand. Keystone by the way would not have increased production in the U.S. The cancelled project was a pipeline for transport to Mexico from Canada.
Samantha
Samantha Jun 22, 2022 3:24PM ET
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Inaccurate talking points hard at work.
Nils Hullmann
Nils Hullmann Jun 22, 2022 2:56PM ET
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dems buying votes...how pathetic.....btw after the tax is lifted this will be even higher...you know why ? lower price higher demand
carlos guo
carlos guo Jun 22, 2022 2:47PM ET
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Biden is the greatest gift to republicans and oil companies. Record oil prices and profits for oil companies, now asking to cut tax on fossil fuels. Brandon's approval at 32%, dems projected to lose the House and Senate in a few months, Trump projected to win for the third time in 2024. Thanks Brandon for your compete in competence. This is what happens when you let CNN tell you who to vote for.
Crypto Current
Crypto Current Jun 22, 2022 9:27AM ET
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Let's go Brandon!
Robert Fhetani
Robert Fhetani Jun 22, 2022 5:32AM ET
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I think in the next 10 years us dollar will lose value due to war crimes it commits
joe balone
joe balone Jun 22, 2022 5:32AM ET
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you misspelled ruble.
 
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