President Joe Biden on Wednesday will call on Congress to pass legislation to create a federal tax holiday on gas and diesel three months in an effort to lower prices at the pump, senior officials said.
The break would cut off 18 cents from a gallon of gasoline and 24 cents for diesel as the summer driving season kicks off. The legislation would cost an estimated $10 billion, a senior government official told reporters during a phone call.
“With our deficit already down a historic $1.6 trillion this year, the president believes we can afford to suspend the gas tax to help consumers, while using other revenues to complete the trust fund for the cost of about $10 billion,” the official said. †
Officials said Biden would ask Congress to make the temporary adjustment in a way that wouldn’t hurt the Highway Trust Fund, which gets its revenue from fuel taxes. Many lawmakers, mostly on the Republican side of the aisle, have cited the trust fund as one reason why they would not support a tax breakthough some Congressional Democrats have also been critical of a gas tax vacation.
Democrats are facing significant political headwinds just months away from the November midterm elections as numerous polls show gas prices and inflation as the top concerns for voters.
Biden will comment on gas prices and what his administration has called “Putin’s price hike” at 2 p.m. Wednesday, referring to Russian President Vladimir Putin.
During those comments, Biden also plans to call on state and local governments to provide additional consumer relief by suspending state gas taxes or similar actions, senior officials said.
different states have previously introduced their own tax exemptions.
According to AAA data on Tuesday, the national average price was $4.96, with prices higher in parts of the West Coast and Midwest.
The administration’s new attempt comes after Biden said Monday he was seriously considering halting the federal gas tax as the White House plans to take steps to cut costs at the pump ahead of the July 4 holiday.
Energy Secretary Jennifer Granholm, who is expected to meet with oil refining executives on Thursday, told CNN’s “State of the Union” that “part of the challenge with the gas tax, of course, is that it finances the roads.”
When asked about the potential impact on infrastructure plans, Biden told reporters on Tuesday that “it won’t impact major road construction and major repairs.”
Biden’s push for a gas tax break would come months after his administration its actions to fight gas prices stepped up in April by releasing 1 million barrels per day from the Strategic Petroleum Reserve and issuing an emergency waiver to suspend a summer ban on the use of a specific ethanol blend of fuel.