Biden Proposes Drop-in-the-bucket Temporary Suspension of Federal Gas & Diesel Tax

WASHINGTON, D.C. – The price of gas is up dramatically around the world, and by almost $2 per gallon in the United States. President Biden on Wednesday called on Congress and the states to take additional legislative action to provide direct relief to American consumers.

Specifically, he is calling on Congress to suspend the federal gas tax for three months, through September, without taking any money away from the Highway Trust Fund. And he is calling on states to take similar action to provide some direct relief, whether suspending their own gas taxes or helping consumers in other ways.

Right now, the federal government charges an 18 cent tax per gallon of gasoline and a 24 cent tax per gallon of diesel. Those taxes fund critical highways and public transportation, through the Highway Trust Fund. But in this unique moment, with gas prices near $5 a gallon on average across the country, President Biden is calling on Congress to suspend the gas tax for three months – until the end of September – to give Americans a little extra breathing room.

Biden’s gas tax holiday, however, has already been met with skepticism from senior Democrats in the House. Speaker Nancy Pelosi and others have questioned whether the policy will lead to savings at the pump, rather than excess profits for gas companies. Democrats chose not to include it in their own bill aimed at lowering gas prices last month.

Politico is reporting that any federal gas holiday does not have broad Democratic support, let alone the multiple Republicans needed to pass the policy in the Senate.

The more likely scenario, multiple Democrats acknowledged on Tuesday evening, was for Biden to put pressure on states to enact their own gas tax holidays, as states like Maryland have already done, though with limited political gains. Privately, some Democratic lawmakers dismissed the move as “too little, too late.”