President Joe Biden on Wednesday called on Congress to suspend federal gasoline and diesel taxes for three months — an election-year move meant to ease financial pressures that was greeted with doubts and ridicule by experts, lawmakers, and economists.
“It doesn’t reduce all the pain but it will be a big help,”Biden stated that he was trying to make use of the bully pulpit because his administration feels it doesn’t have much control over the soaring prices for gas. “I’m doing my part. I want Congress, states, and industry to do their part as well.”
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Concerning the Federal Tax on Gas at 18.4 Cents per Gallon, and 24.4 Cents Per Gallon on Diesel Fuel. If the gas savings were fully passed along to consumers, people would save… but not much.
One critic did the math on social media —
Working families will have breathing space for 90 days thanks to the federal gas tax holiday.
18 cents per gallon
260 miles per week
To make math simple, 26 mpg
This major gas price reduction policy should help drivers save approximately $2 per week.
— Ryan Maue (@RyanMaue) June 22, 2022
IF Biden were to implement a gas tax holiday (cutting the federal gas tax to zero), here’s what motorists might save per week with average consumption…
Pickup truck $5.52
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) June 20, 2022
Biden’s push faces uphill odds in Congress, which must act to suspend the tax, and where many lawmakers, including some in the Democratic Party, have expressed reservations.
Many economists are skeptical about the possibility of a gas tax vacation.
Democratic House Speaker Nancy Pelosi offered a noncommittal response to Biden’s proposal, saying she would look to see if there was support for it in Congress.
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“We will see where the consensus lies on a path forward for the president’s proposal in the House and the Senate,”Pelosi spoke.
Although it is unlikely to get a gas tax holiday passed through the 50-50 Senate Majority Leader Chuck Schumer from New York announced Wednesday that Democrats will instead be focusing on their bill against oil companies “manipulating the market”Profits and prices will rise.
Barack Obama, in his 2008 Presidential Campaign, called the idea for a gas-tax holiday “a great idea.” “gimmick”That allowed politicians to “say that they did something.”He also said that the oil companies could increase their prices to offset any tax relief.
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 that were criticized by economists — including the release of oil from the U.S. strategic reserve and greater ethanol blending this summer — have failed to delivered savings at the pump, a risk that carries over to the idea of a gas tax holiday.
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. A shortage in oil and gas refineries is the root problem, which a tax holiday can’t necessarily solve.
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, continued disruptions from the coronavirus, and increased consumer spending tied to huge coronavirus relief packages.
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“In the immediate near term, it is critical to stem the increase in oil prices,”Zandi stated last week that the United Arab Emirates and Saudi Arabia would be able to help boost supply and decrease prices. Republican lawmakers tried to assign more blame to Biden. They claimed that Biden created a hostile climate for oil producers in the United States, which led to lower production.
Senator Republican Mitch McConnell ridiculed the gas tax holiday. “ineffective stunt”In a Wednesday speech on the floor “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 stated.
Rep. Peter DeFazio (Democrat chairman) of the House Transportation and Infrastructure Committee stated that he wouldn’t support the suspension of the gas tax. “I’m going to be working against it. I have the largest committee in Congress, so we’ll see.”
DeFazio suggested that taxing oil companies would be a better option. “windfall profits.”
According to administration officials, the Highway Trust Fund will be funded at $10 billion. However gas taxes provide a large source of revenue for it. They did not mention any other revenue sources.
In order to improve oil production and gasoline refining capacities, the president also called for lower profit margins from energy companies.
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This has led to tensions between oil producers and the United States. Biden has deemed these companies as making a profit. “more money than God.”This set off a series of events. Michael Wirth (head of Chevron) sent a note to the White House stating that the administration was not following the rules. “has largely sought to criticize, and at times vilify, our industry.”
Biden responded to questions about the letter by saying that Wirth had been his inspiration: “He’s mildly sensitive. I didn’t know they’d get their feelings hurt that quickly.”
To discuss how to improve supply, energy companies will meet with Jennifer Granholm (Environment Secretary).
This article was contributed by the Associated Press
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