Equilibrium & Sustainability

Questions grow about Biden’s position on a gas tax holiday

A bicyclist rides past a price board at a gas station
Associated Press/Jeff Chiu
A bicyclist rides past a price board at a gas station in San Francisco on April 4, 2022.

President Biden is facing growing questions about whether he will throw his support behind a federal gas tax holiday in an attempt to save Americans some money at the pump while gas prices remain high from inflation and the impact of Russia’s invasion into Ukraine.

The White House has not articulated a clear position on the issue, saying it is not taking anything off the table, as states like Maryland and Connecticut have implemented a gas tax holiday, and state legislators in Virginia are looking at a temporary suspension.

And it’s an issue that divides his own party, as it’s backed by swing-state senators facing tough races in November but opposed by Speaker Nancy Pelosi (D-Calif.) and Senate swing vote Sen. Joe Manchin (D-W.Va.).

Six Democratic governors have called on Congress to suspend the federal gas tax for the remainder of the year, which would save Americans 18.4 cents per gallon.

“Money saved at the pump translates into dollars back in consumers’ pockets for groceries, child care, rent and more,” wrote Michigan’s Gretchen Whitmer, Minnesota’s Tim Walz, Pennsylvania’s Tom Wolf, Colorado’s Jared Polis, New Mexico’s Michelle Lujan Grisham and Wisconsin’s Tony Evers in a letter to congressional leaders last month.

And the push has been bipartisan.

Republican Maryland Gov. Larry Hogan told CNN on Sunday he supports a pause on the gas tax on the federal level.

“We’ve been pushing for that along with also just increasing domestic productions. I thought it was a good step when the Biden administration tapped the oil reserves, which will help bring those prices down. But I think pausing the federal gas tax is a good idea,” Hogan said.

The White House has not shut down the idea — but also has not endorsed it.

“It is not off the table, in fact. The president is looking at every option to provide relief to consumers around gas prices. Obviously, a lot of these conversations are happening in Congress. But, again, the president is not taking anything off the table at this stage,” White House communications director Kate Bedingfield told reporters on Thursday.

White House economic adviser Jared Bernstein said it should be on the table when asked if he personally thinks a suspension is good policy.

“I’m not going to legislate from here or even get into ongoing policy considerations beyond saying: When we say ‘all options are on the table,’ we mean it,” he said on Friday.

The White House had no update beyond that when asked for comment this week.

On Capitol Hill, swing-state Democrats, including Sens. Mark Kelly (D-Ariz.) and Maggie Hassan (D-N.H.), are pushing the idea.

Hassan and Kelly introduced legislation that would suspend the tax even before Russia’s invasion of Ukraine drove up prices, as prices were already high because supply that was cut during the coronavirus pandemic has been slow to recover.

Asked on Tuesday whether he had the White House’s support, Kelly did not directly answer, instead touting the proposal as a bipartisan idea.

“There is, and there has been in the past, even bipartisan support on this,” he said. “It’s never been passed before, and we’ll be continuing to try to move this forward.”

Hassan spokesperson Anne Feldman told The Hill via email that the senator is still pushing for the bill to both congressional leadership and the Biden administration.

“We need to use every tool at our disposal to lower costs for Granite Staters at the pump, and one way we can help do that is by eliminating the gas tax while we’re seeing sky-high prices,” Hassan said in a statement shared through the spokesperson.

But other members of their party, whose views span the ideological spectrum, have raised opposition to a gas tax holiday, and with widespread opposition from congressional Republicans, the legislation faces an uphill battle.

Manchin, a moderate Democrat and frequent Senate swing vote, cited the possibility of cuts to spending on highways that are funded by the tax.

“People want their bridges and their roads, and we have an infrastructure bill we just passed this summer, and they want to take that all away,” Manchin said in February.

Last week, Pelosi also raised concerns about the highway funds — and suggested that direct payments to consumers could work better.

“The pro is very showbiz. ‘OK, let’s just do something, there it is.’ But it is not necessarily landing in the pocket of the consumer,” Pelosi said at a press conference.

“How do we help people directly? If you’re going to have to pay for it and you don’t want it to come out of the Trust Fund, something could be a rebate card or a direct payments. And those are the things that are being considered,” she added.

The questions come as the Biden administration has taken other moves in an attempt to alleviate high gasoline prices — and constant attacks from Republicans. Last week, it announced the largest-ever release of oil from the country’s strategic reserve, saying it will release a million barrels per day over a six-month period.

The federal government charges an excise tax of 18.4 cents per gallon, which has not increased since 1993 under former President Clinton and is not indexed to inflation. The national average price of gas as of Tuesday was $4.18, according to AAA.

Severin Borenstein, facility director of the Energy Institute at the University of California Berkeley’s Haas School of Business, argued that a temporary suspension of the federal gas tax wouldn’t save consumers enough to be worth it, and that some of the savings would go to producers, too.

“We’re already getting a huge amount of volatility and I think even if we did suspend the gas tax, it wouldn’t show up as any significant decrease that consumers can say, ‘boy, that was a lot of relief.’ It would be a tiny change,” he said.

Borenstein added that the governors taking steps to suspend state gas taxes is a not unexpected political move while Americans are looking for relief at the pump.

“The people that are getting hit by high gas prices are very vocal and even people who are not really being hit with high gas prices just think it’s wrong that oil prices and gas prices are so high,” he said. “So they say, ‘do something about it.’ ”

Tags gas prices Jared Bernstein Joe Biden Joe Manchin Larry Hogan Maggie Hassan Mark Kelly Michigan Minnesota Nancy Pelosi New Mexico Pennsylvania Wisconsin

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