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As Democrats eye gas price relief measures, some are skeptical

Rep. Kurt Schrader dismisses rebate idea as 'pandering' and 'not realistic'

Rep. Ro Khanna, D-Calif., introduced a bill that would implement a “windfall profits” tax on large oil companies and distribute the revenue to consumers via a quarterly rebate.
Rep. Ro Khanna, D-Calif., introduced a bill that would implement a “windfall profits” tax on large oil companies and distribute the revenue to consumers via a quarterly rebate. (Tom Williams/CQ Roll Call)

House Democrats, including many of the party’s vulnerable incumbents, are pushing to provide consumers relief from pain at the gas pump through rebates or tax cuts.

But some admit the proposals aren’t going anywhere and would amount to little more than political messaging bills. 

“That’s not happening,” Rep. Kurt Schrader, D-Ore., said. “It’s just unrealistic. I mean, we can’t afford to do all that sort of thing at this point in time. It’s pandering. Let’s be smart.” 

Schrader is a vulnerable incumbent and understands why his fellow “Frontline” program Democrats are proposing ideas like suspending the federal gasoline tax through the end of the year or providing direct rebates to consumers. 

“I think they’re all trying to do what they think they need to do to get reelected,” he said. “That’s fine. Their constituents maybe feel strongly in that area.”

But Schrader has polled his constituents about the issue. He said they understand Russia’s war in Ukraine means higher inflation and higher gas prices, “and they’re willing to make that sacrifice for freedom.” 

Inside Elections with Nathan L. Gonzales rates Schrader’s race in Oregon’s newly redrawn 5th District as Tilt Democratic. Schrader said voters in his district want him to work on legislation that can actually get signed into law, and the various gas price relief proposals Democrats are floating wouldn’t pass the Senate. 

“I’m not for any more messaging bills,” he said.

‘Soup to nuts plan’

Democratic Congressional Campaign Committee Chairman Sean Patrick Maloney sees things differently. 

“We need a soup to nuts plan on getting prices lower at the pump because it’s critical,” he said. “This is a real problem for working and middle class families like the one I grew up in. And we shouldn’t shy away from tackling that challenge, even as we do the right thing and stand up to [Vladimir] Putin, including by restricting Russian imports, which is jacking the price.” 

The nationwide average price for a gallon of regular unleaded was about $4.27 on Friday, according to AAA. That’s down from a record high of $4.33 last week as oil prices have eased somewhat, but still nearly 50 percent higher than a year ago.

Maloney — who in addition to heading the campaign arm faces his own contest that Inside Elections rates Likely Democratic — said House Democrats have a lot of good ideas for easing the pain at the pump. He introduced a bill “to contribute to that conversation” that would establish a 50 percent excise tax on oil companies’ profits and distribute that revenue to consumers via a quarterly dividend.

Democrats are also discussing and introducing legislation that seeks to address gas prices from an energy production perspective. The Energy and Commerce and Natural Resource committees have asked top executives from oil and gas companies to testify about high gas prices in separate hearings the first week of April. 

[Oil company executives called to hearing on gas price increases]

Maloney said President Joe Biden should also bring energy producers to the White House to lay on the pressure. He referenced a famously bloody scene from the 1987 movie “The Untouchables” to make his point.

“If I were down at the White House, I would bring the oil company executives in, put them around a table and go around that table like Al Capone with a baseball bat and say you’d better lower gas prices for the American public because you’re not going to profit off of Putin’s war,” he said.

Taxing discussions

Meanwhile, tax writers on the Ways and Means Committee have started formal and informal conversations on how to provide relief from high gas prices, panel member Dan Kildee, D-Mich., said. 

While Kildee is a proponent of a measure to suspend the gas tax through the end of the year because it’s easier to implement than other ideas being discussed, he acknowledged, “The relief isn’t as substantial as what we need.” 

Ways and Means Democrats Mike Thompson of California and John B. Larson of Connecticut introduced a bill with Rep. Lauren Underwood of Illinois that would grant tax credits of up to $100 per family for any month this year in which the national average gas price tops $4 per gallon. Underwood is a Frontline Democrat, the campaign program assisting vulnerable incumbents; Inside Elections rates her race Lean Democratic.

Kildee said he is looking at the Thompson bill and is open to other ideas for providing direct relief for people who most need it. But he acknowledged Democrats need to be careful that whatever they do isn’t inflationary, saying any rebates should be “highly targeted and calibrated properly.”

Inside Elections rates Kildee’s race in Michigan’s new 8th District as Tilt Democratic. 

Rep. Earl Blumenauer, D-Ore., another Ways and Means member, said he’s open to limited direct payments to consumers, targeted to lower and middle income families, but he doesn’t like ideas like the gas tax holiday or issuing more oil and gas leases. 

“A lot of things people are talking about will make no difference, no difference to the consumer,” he said. 

Offsetting tax increases

As they consider rebates, Democrats are eying offsets to ensure they’re not deficit spending.

Rep. Ro Khanna, D-Calif., introduced a bill to implement a “windfall profits” tax on large oil companies. The measure would levy a quarterly per-barrel tax equivalent to half the price difference between the pre-pandemic average price per barrel from 2015 through 2019 and the current price and distribute the revenue to consumers through a quarterly rebate.

Kildee said that measure and an excess profits tax are among the ideas that have been discussed. Any tax increases should be targeted to oil companies and justified as a matter of policy, not presented solely as an offset, he argued.

“In an emergency when we’re trying to fight a tyrant like Putin on one hand and sustain the economy through some of the challenges we have … it’s not necessary to provide a direct offset,” Kildee said.  

Republicans, meanwhile, have zero interest in Democrats’ proposals. Ways and Means ranking member Kevin Brady, R-Texas, said rebate proposals are likely to be inflationary and dismissed that and the gas tax holiday idea as political gimmicks that don’t address the core problem. 

“Their attack on energy is coming home to roost for them,” Brady said. “They are just adamantly obsessed with this Green New Deal policy that drives energy prices up.”

Laura Weiss contributed to this report.   

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