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Biden, Dems Want Federal Gas Tax Holiday In Build-Up To Midterms

by Emily Goodin
February 16, 2022, 1:20 PM
in News and Opinion
Reading Time: 3 mins read
A A
3

biden whPresident Joe Biden and Democratic lawmakers are weighing a federal gas tax holiday as prices reach record levels and the party faces an uphill battle in November’s midterm election.

Two of the Democrats’ most vulnerable senators up in 2022 – Mark Kelly of Arizona and Maggie Hassan of New Hampshire – have proposed a bill that would suspend the federal gas tax until Jan. 1, 2023.

The White House is open to the idea as it seeks to combat rising prices Americans face across the board for food, rent, and energy.

‘Every tool is on the table to reduce prices,’ White House spokeswoman Emilie Simons said in a statement to DailyMail.com.

‘The President already announced a historic release of 50 million barrels from the strategic petroleum reserve, and all options are on the table looking ahead.’

The federal gas tax is 18.4 cents per gallon for standard gasoline and 24.4 cents per gallon for diesel fuel.

Today’s gas average is $3.498 a gallon, according to AAA. California, which has the highest price of any state, is approaching the $5 mark as its average price hits $4.711.

The overall average price of gas is up over $1 in the past year.

The federal gas tax, established in 1932, funds the Highway Trust Fund, which in turn finances federal transportation spending.

However, the Committee for a Responsible Federal Budget estimates the tax holiday would ‘would reduce gas tax revenues by roughly $20 billion and could worsen inflation once the holiday expires.’

The Highway Trust Fund faces an annual shortfall in funding, partly because the gas tax hasn’t changed since 1993 and more people are driving hybrids or electric vehicles that aren’t subject to the gas tax.

The watchdog group found that this year, ‘more than $42 billion in revenue is expected to flow into the Highway Trust Fund, over three-fifths of which will come from the federal gas tax. A federal gas tax holiday that lasts from March through December would decrease trust fund revenue by $20 billion, cutting this year’s Highway Trust Fund revenue stream nearly in half.’

Larry Summers, a former treasury secretary who has been critical of the Biden administration’s handling of inflation, told The Washington Post that a gas tax holiday is ‘short-sighted, ineffective, goofy, and gimmicky.’

‘It’s terrible policy at a moment we’ve labeled climate change as an existential threat,’ he told the newspaper. …snip…

The proposal comes as Americans are expressing their frustration with the state of the economy, the record levels of inflation, and the stagnation from the coronavirus pandemic.

Inflation hit 7.5% in January – the highest it’s been in 40 years.

Gallup’s annual Mood of the Nation survey found just 33% are satisfied with the economy – a drop of 10 points over the last year and a whopping 35 points over the past two years. And just 27% are satisfied with the nation’s energy policy – a low figure that is blamed on the high gas prices.

The Biden administration in November released 50 million barrels of oil from the Strategic Petroleum Reserve to help fight high gas prices before the holidays.

But prices remain up and that trend could continue with the cold weather and the Russian threat against Ukraine.

Oil prices have risen to well over $90 a barrel – their highest levels since 2014.

Read rest at Daily Mail

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Comments 3

  1. Spurwing Plover says:
    4 years ago

    The Democrat Lemmings are running right off the cliff to their own demise and they seem blind to the fact of why its happening

  2. Tom says:
    4 years ago

    Democrats are toast, extremely well burnt, in 2022 as long as the elections are halfway honest. That is why they are desperate to buy votes. Our gov in Michigan is giving every driver $400 trying to look good. This is only a return of the over payments we have been making for years into the PIP fund. Do not be fooled, once they get back into office for another term, they will reinstate communism.

  3. Steve Bunten says:
    4 years ago

    Yeah, that will really help with the cost of gasoline. Reducing the $3.49 average cost by all of 18c will really do the trick! Although there goes the Federal Highway Fund for this year.

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