“By suspending the 18-cent gas tax and the federal gas tax for the next 90 days, we can reduce gas prices and provide some relief to families,” Biden said in a statement from the White House.
“I fully understand that the gas tax holiday alone is not going to fix the problem, but it will provide immediate relief to families and give us some respite as we continue to work to reduce prices in the long run.”
After facing backlash from the president’s own allies on Capitol Hill, the idea of approving Congress for such a move has long been met with controversy.
Biden called on states to take steps to eliminate their own taxes on gas and diesel. Ahead of a scheduled meeting with executives this week, he will tell oil refineries to increase their capacity.
Combined, these moves could reduce the price of a gallon of gas by $ 1, Biden said. Yet that figure relies on a number of steps that are completely out of the control of the president — at least one skeptic who convinces Congress to approve his plan.
Steps of Biden’s recent effort to show that he is taking the initiative to reduce fuel prices as Americans become increasingly frustrated with the financial burden. White House officials have been considering a gas tax holiday for months, but it has been put on hold due to concerns over how it could be obtained in Congress.
Republicans are widely opposed to removing the Cakes tax. Even some Democrats, including House Speaker Nancy Pelosi, are silent on the idea. In the past, senior Democrats – including President Barack Obama on the campaign trail in 2008 – have called the gas tax holiday a “trick.”
Nevertheless, in the face of growing anger and the start of the summer driving season, Biden decided that even small steps in the index range were worth taking.
“In the situation we are in today, this is not a gimmick. In an interview with CNN “New Day” on Wednesday morning.
The current federal tax on gas is about 18 cents a gallon, while the federal tax on diesel is 24 cents a gallon. Even if the savings are sent directly to the consumer by raising those taxes – this is not guaranteed – the savings for a refill are only a few dollars.
“Look, it will have some impact, but it will not have an impact on major road construction and major repairs,” he told reporters.
Economists are skeptical
Some economists say the savings to consumers will be lower as retailers raise the base price of gas.
“Whatever you think about the specialty of the gas tax holiday in February, it’s a bad idea right now,” Jason Furman, a senior economist in the Obama administration, wrote on Twitter. “Refineries are now more restricted, so supply is almost completely uncertain. Most of the 18.4-cent reduction will be pocketed by industry – a few cents may be passed on to consumers.”
Senior executives agreed with the criticism, but said Biden would pressurize companies to send savings.
“The president is calling on industry, companies and retailers to send it to consumers at the pump,” Hochstein said, without elaborating on anything specific that the president can do to ensure consumers see the full savings.
“We will explore it, we will call on the industry to do it right and send it,” he said.
Another official, speaking prior to the announcement, acknowledged that withholding the tax was “not going to solve the whole problem.”
“We see this as something that can be done to take real action to alleviate the pain at the pump, and we see this as part of a set of policies designed to provide relief, including policies that focus on the distribution side,” the official said.
“We’re definitely approaching it in a constructive, actionable, pragmatic way. I think the American people and their leaders need to do that again,” said a second senior executive, referring to Thursday’s meeting with seven top executives and Energy Secretary Jennifer Granholm.
Biden searches for victims
The president has raised the heat on oil and gas companies in recent weeks as gas prices have risen, with the national average rising above $ 5 per gallon at one point in the past week.
Biden has blamed Russia’s war on Ukraine for raising gas prices, but called on oil and gas companies to do more than just cut costs and accuse the war of being “profitable.” On Tuesday he reiterated some of those arguments, saying the country needed “more refining capacity”.
“This notion that they have no oil for digging and cultivating is not true,” he said.
In response to the president’s criticism, the oil industry has largely said that it was the Biden administration’s fault that prices were so high that they regard them as limitations on domestic oil and gas production.
Chevron CEO Mike Worth said in a letter on Tuesday that Biden should stop criticizing the oil and gas sector and called for a “change in attitude” from the White House.
“Your management has often tried to criticize and sometimes discredit our industry,” Worth wrote in an open letter to Pitton. “These measures are not conducive to meeting the challenges we face and are not worthy of the American people.”
Biden responded later in the day: “He’s mildly sensitive,” he added: “I did not know they would hurt their feelings so quickly.”
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