Biden urges lawmakers to give Americans a gas tax holiday
June 22, 2022
US President Joe Biden on Wednesday urged lawmakers to suspend federal and state gasoline and diesel taxes for three months amid soaring fuel prices.
"We can bring down the price of gas and give families just a little bit of relief," Biden said in a White House address.
The president has been under increasing pressure to act as record-high gas prices weigh down his poll ratings and risk Democrats' chances of retaining congressional power in November's elections.
"It doesn't reduce all the pain but it will be a big help," Biden said.
How likely is Biden's proposal?
The federal gasoline tax is 18.4 cents a gallon and 24.4 cents a gallon federal tax on diesel fuel. Some state taxes are even higher.
However, even lawmakers in Biden's own party have expressed resistance to suspending the tax.
House of Representatives Speaker Nancy Pelosi worried the move could have a limited effect on prices if oil companies and retailers pocket much of the savings.
Senate Republican leader Mitch McConnell mocked the gas tax holiday as an "ineffective stunt."
"This ineffective administration's big new idea is a silly proposal that senior members of their own party have already shot down well in advance," he said.
Biden vowed to challenge major oil companies for ideas on how to bring back idled refining capacity when they meet with his energy secretary on Thursday. He has also previously called on energy companies to accept lower profit margins.
What effect would a tax suspension have?
Biden's energy adviser Amos Hochstein said consumers could save about 50 cents per gallon if Congress and the states heed the president's call and the oil industry doesn't pocket the savings.
"That's a little bit of breathing room for the American people as we get into the summer driving season," Hochstein, senior adviser for global energy security at the State Department, said on CNN.
The underlying problem is a shortage of oil and refineries that produce gas.
"Pausing the federal gas tax will certainly provide near-term relief for US 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 US energy production, it said.
lo/rt (AP, Reuters)