Bid to Call for Three-Month Federal Gasoline Tax Suspension

WASHINGTON — President Biden is planning to call for a three-month suspension of federal gasoline and diesel taxes, according to senior administration officials.

Mr. Biden and his advisers have been discussing the issue for months in the midst of increasing political pressure to take action to address record-high gas prices. The announcement is expected on Wednesday, officials said, when Mr. Biden is scheduled to deliver remarks on gas prices at 2 pm Eastern Time.

A suspension of the 18.4-cents-a-gallon federal gasoline tax and 24.4-cents-a-gallon diesel tax through September would require congressional approval, so a move by Mr. Biden to throw his support behind the effort would be largely symbolic. Lawmakers of both parties have expressed resistance to suspending the tax, a move that would likely need bipartisan support to become law. Some Democrats worry that a suspension of the tax would have a limited effect on prices, with oil companies pocketing much of the savings.

The White House emailed offices on Capitol Hill on Tuesday informing them of the proposed suspension, people familiar with the matter said. Punchbowl News first reported Mr. Biden’s expected announcement.

Mr. Biden is also expected to call on Congress to suspend those federal taxes without affecting the Highway Trust Fund, which pays for infrastructure spending and is funded by the gas tax, officials said, adding that the roughly $ 10 billion in costs could come from other revenue streams . The president is also expected to ask state and local governments to suspend their gas taxes or offer rebates.

A gallon of regular unleaded gasoline averaged about $ 4.97 on Tuesday in the US, according to AAA. That is down slightly from the record of just under $ 5.02, which was set June 14.

Gas prices began increasing last year and surged to record levels following Russia’s invasion of Ukraine. High prices on everything from food to fuel have weighed down Mr. Biden’s approval ratings, prompting concerns that Democrats could see major losses in the midterm elections. Overall inflation is the highest in decades, running at 8.6% in May.

Mr. Biden, who has said inflation is his top economic priority, has taken several steps in recent months to address high gas prices, with limited success. The administration tapped oil supplies from the Strategic Petroleum Reserve, and the Environmental Protection Agency issued an emergency waiver in April allowing gas stations to sell high ethanol content gasoline this summer, despite environmental concerns.

Treasury Secretary Janet Yellen has in recent weeks sought to modify elements of the European Union’s sanctions on Russia because of her concern about the impact they could have on global oil prices.

Last week Mr. Biden urged US oil refiners to expand capacity and accused the companies of profiteering as the public pays record prices at the pump. Energy Secretary Jennifer Granholm is scheduled to meet with the heads of major US oil refiners Thursday, according to the White House.

Mike Wirth, the chief executive of Chevron Corp.

, one of the companies Mr. Biden urged to expand capacity, said in a letter to the president Tuesday that his administration has at times vilified the oil industry. “We need clarity and consistency on policy matters ranging from leases and permits on federal lands, to the ability to permit and build critical infrastructure, to the proper role of regulation that considers both costs and benefits,” Mr. Wirth wrote.

Asked by a reporter Tuesday for his response to the letter, Mr. Biden said of Mr. Wirth, “He’s mildly sensitive. I did not know they’d get their feelings hurt that quickly. ”

Rising oil costs have helped push the national average price for a gallon of gasoline to record levels, leading to increased inflation across the US Photo illustration: Todd Johnson

Some of Mr. Biden’s advisers have raised concerns in private that a suspension of the gas tax will do little to help consumers because the fee accounts for a small proportion of the overall cost of gas.

In 2008, Barack Obama, then a candidate for president, called the idea a gimmick. Jason Furman, a Harvard economist who was chair of Mr. Obama’s Council of Economic Advisers, wrote Tuesday on Twitter before news of Mr. Biden’s expected announcement became public: “Most of the 18.4 cent reduction would be pocketed by industry—With maybe a few cents passed on to consumers, ”

On Capitol Hill, lawmakers across the political spectrum have questioned the wisdom of the move.

House Speaker Nancy Pelosi (D., Calif.) Earlier this year said the arguments for suspending the gas tax were largely optical.

In March, Mrs. Pelosi called the arguments for suspending the gas tax “very showbiz,” characterizing proponents as arguing, “Let’s just do something, there it is.” She argued that the benefits of a suspension are “not necessarily landing in the pocket of the consumer.”

Republicans have hammered Mr. Biden for high gas prices but dismissed the gas-tax suspension, instead urging more federal support for fossil-fuel production.

Still, many Democrats who face competitive re-election races this fall have advocated for the move as they prepare to face voters upset about inflation. Late. Maggie Hassan (D., NH) said in a recent campaign that she was “taking on members of my own party to push a gas tax holiday.”

“That’s how we lower costs and get through these times,” she said in the ad.

The Biden administration is exploring other options for trying to lower inflation, including paring back tariffs on imports from China, though that idea also faces skepticism from some in the administration.

Inflation and the Economy

Write to Andrew Restuccia at, Andrew Duehren at and Tarini Parti at

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