Biden seeks ‘gas tax holiday’ to tame soaring US fuel costs

Joe Biden is calling on Congress to suspend the federal gas and diesel tax for three months in a bid to provide temporary relief to US households struggling with high inflation.

The so-called gas tax holiday proposed by the US president would involve the elimination of the federal tax of 18.4 cents on each gallon of gasoline and the 24 cent tax on diesel that consumers pay at the pump .

The total cost of the measure would be approximately $10 billion. Biden is asking Congress to replenish the highway trust fund, which is normally funded by these taxes, with other revenue increases.

“President Biden understands that a gas tax exemption alone will not be enough to alleviate the increased costs we have seen,” the White House said in a backgrounder on Wednesday. “But the President believes that at this unique time when the war in Ukraine is imposing costs on American families, Congress should do what it can to allow working families to breathe.”

Some states, including New York and Florida, have moved to suspend their own gasoline taxes and offer drivers relief from high prices.

Biden’s call for a gas tax waiver marks the White House’s latest effort to show its determination to do everything in its power to tame inflation and lower energy costs in the country. middle of the war in Ukraine.

In recent months, Biden has released oil from the Strategic Petroleum Reserve, pushed domestic energy groups to increase production and is due to visit Saudi Arabia for talks with a regime he once considered a “pariah”. The president is expected to speak on energy prices from the White House on Wednesday afternoon.

As gasoline prices have soared to around $5 a gallon, suspending the federal tax would provide only a mild reprieve for struggling consumers. Consumer prices rose at an annual rate of 8.6% last month, clouding Americans’ perception of the strength of the US recovery.

Biden considered a gas tax exemption in February, but decided against it. Critics have warned that the policy could backfire, boost demand and contribute to inflation, while failing to provide significant relief to families. There is also no guarantee that it would be approved by Congress.

“I’m glad @POTUS is exploring ways to lower gas prices at the pump. Yet suspending the main way we pay for infrastructure projects on our roads is a short-sighted and ineffective way to provide a We should explore other options to reduce energy costs,” wrote Tom Carper, the Democratic senator from Delaware, on Twitter.

Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, a nonpartisan think tank in Washington, said a gas tax holiday would “modestly reduce prices at the pump but exacerbate overall inflationary pressures and increase demand. of an energy source already short in supply”.

Oil executives will likely welcome the move, which amounts to a subsidy for their product. Leaders of some of the largest oil and fuel producers in the United States will meet with Energy Secretary Jennifer Granholm on Thursday.

But high fuel prices have heightened tensions between Biden and oil industry executives. On Tuesday, he lashed out at Chevron chief executive Mike Wirth after he said in a letter to the chairman that a “change in approach” was needed to bring prices down and that the administration should not ” defame” the industry.

Biden called Wirth “sensitive,” while urging the industry to increase fuel supplies.

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