President Joe Biden on Wednesday called on Congress to pass legislation that would create a federal tax holiday on gas and diesel fuel for three months to lower prices at the pump.
The pause would trim 18 cents off a gallon of gas and 24 cents for diesel as the summer driving season is getting underway. The legislation would cost an estimated $10 billion, a senior administration official told reporters on a call.
Biden said in remarks from the White House: "I fully understand the gas tax holiday alone is not going to fix the problem. But it will provide families some immediate relief, give them a little bit of breathing room, so we continue working to bring down prices for the long haul."
Biden asked Congress to make the temporary adjustment in a way that doesn't harm 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 a reason they wouldn't back a gas tax holiday, although some congressional Democrats have also been critical of it.
Biden said he is also calling on companies to increase refining capacity to lower prices in the long term and gas station operators to come up with ways to bring down prices.
“These are not normal times. Bring down the price you are charging at the pump to reflect the cost you are paying for the product,” Biden said. “Do it now. Do it today — your customers, the American people, they need relief now.”
The Biden administration will face an uphill battle to draw support in Congress for its gas tax holiday proposal. A number of Republicans have already come out in opposition, and even Democratic leaders have expressed some concerns.
“Well, we tried. And the Republicans blocked it,” Senate Majority Leader Chuck Schumer, D-N.Y., said Wednesday at a weekly news conference.
House Majority Leader Steny Hoyer, D-Md., said he supports Biden's aim to lower prices at the pump, but he said he wasn't sure whether a gas tax holiday would have the "intended effect in terms of the retail price and whether in fact it will save consumers money."
House Speaker Nancy Pelosi, D-Calif., said in a statement that Democrats “will see where the consensus lies on a path forward for the President’s proposal in the House and the Senate, building on the strong bills to lower prices at the pump already passed by House Democrats including the Consumer Fuel Price Gouging Prevention Act and the Lower Food and Fuel Costs Act.”
Democrats face significant political headwinds just months from the November midterm elections, as numerous polls find that gas prices and inflation are top concerns for voters.
Biden also called on state and local governments to provide additional consumer relief by pausing state sales tax on gas or similar actions, senior administration officials said.
Biden said, "States are now in a strong position to be able to afford to take some of these actions."
Several states have implemented their own tax holidays.
According to AAA data Tuesday, the national average price was $4.96, with higher prices in parts of the West Coast and the Midwest.
Energy Secretary Jennifer Granholm, who is meeting with oil refining executives Thursday, told reporters at Wednesday's White House briefing that she plans “to discuss actions that government and industry can take to increase capacity and to safely operate their existing refineries and to overcome the hurdles that are in the way to meeting America’s demand and to increase supply.”
Asked about Biden's ability to secure congressional support for the tax holiday, Granholm said the president has an "ongoing" conversation with Democrats and Republicans about mitigating consumer costs.
“I would hope that both sides of the aisle are listening to their constituents about getting relief," she said.
The Biden administration stepped up its actions to combat gas prices in April by releasing 1 million barrels daily 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.
