Biden urges US Congress to suspend federal gas tax three months

President Joe Biden has 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 by many lawmakers.

The Democratic president also called on states to suspend their own gas taxes or provide similar relief, and he delivered a public critique of the energy industry for prioritising profits over production. It would take action by lawmakers in Washington and in statehouses across the country to actually bring relief to consumers.

“It doesn’t reduce all the pain but it will be a big help," Biden said, using the bully pulpit when his administration believes it has run out of direct levers to address soaring gas prices. "I’m doing my part. I want Congress, states and industry to do their part as well.”

At issue is the 18.4 cents per gallon federal tax on gas and the 24.4 cents per gallon federal tax on diesel fuel. If the gas savings were fully passed along to consumers, people would save roughly 3.6 percent at the pump when prices are averaging about $5 a gallon nationwide.

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Faced with doubts

Biden's push faces uphill odds in Congress, which must act in order to suspend the tax, and where many lawmakers, including some in his own party, have expressed reservations. Even many economists view the idea of a gas tax holiday with scepticism.

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.

“We will see where the consensus lies on a path forward for the president’s proposal in the House and the Senate," Pelosi said.

Unlikely to pass a gas tax holiday through the 50-50 Senate, Majority Leader Chuck Schumer of New York said on Wednesday that Democrats will focus instead on their bill to crack down on oil companies “manipulating the market” for higher prices and profits. “We’re going to focus on that issue,” Schumer said.

In his speech, Biden tied higher energy prices to Russia's assault on Ukraine and said, “defending freedom, defending democracy was not going to go without cost for the American people and the rest of the free world.” The president noted that lawmakers backed sanctions against Russia and aiding Ukraine despite the risks of inflation from resulting energy and food shortages.

Democrats, Republicans and independents in Congress chose to support Ukraine, “knowing full well the cost,” he said.

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'Ineffective stunt'

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 — including the release of oil from the US strategic reserve and greater ethanol blending this summer — have not delivered savings at the pump, a risk that carries over to the idea of a gas tax holiday.

Senate Republican leader Mitch McConnell mocked the gas tax holiday as an “ineffective stunt” in a Wednesday floor speech. “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.

Energy companies are scheduled to meet on Thursday with Energy Secretary Jennifer Granholm to discuss ways to increase supply.

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