Pelosi dismisses gas tax hiatus, says consumers wouldn’t benefit

Her stance comes as six Senate Democrats call for a holiday through 2022

Pelosi speaks to reporters in the Capitol on Thursday. She said rebate cards or direct payments are being considered to help offset higher fuel costs. (Tom Williams/CQ Roll Call)
Pelosi speaks to reporters in the Capitol on Thursday. She said rebate cards or direct payments are being considered to help offset higher fuel costs. (Tom Williams/CQ Roll Call)
Posted March 31, 2022 at 3:59pm

House Speaker Nancy Pelosi on Thursday appeared to shoot down the idea of a gas tax holiday, dismissing the idea as “very showbiz” and arguing it would not have a practical impact on consumers.

She said such a holiday has appeal because it is “immediate,” but added, “the con is that the oil companies do not necessarily pass that on to the consumer ... you cannot write a law that requires them to pass it on.”

Were Congress to pass a gas tax holiday, she said, taxpayers would ultimately have to pay for the shortfall in the Highway Trust Fund, which pays for highways and transit.

“We’re paying for something to give a break to the oil companies that isn’t even going to the consumers,” she said. “So that’s the con.”

Instead, she suggested alternatives such as a rebate card or direct payment. “Those are the things being considered,” she said, adding that there are “a number of approaches that are on the table.”

Pelosi’s comments run counter to the position of a group of six Senate Democrats — four seeking reelection — who last month introduced a bill to cut the excise tax on gasoline produced, imported or sold from 18.4 cents per gallon to zero until Jan. 1, 2023.

That bill would apply only to the federal gasoline tax, not to the 24.4-cent-per-gallon tax on diesel fuel used for most trucks, buses and boats.

The Senate Democrats, a group that includes Mark Kelly of Arizona and Raphael Warnock of Georgia, say they are still determined to have the Senate take up the measure, though they had hoped to see a floor vote during March.

“I’m going to continue to push for it,” Warnock said Wednesday, adding that “all of the people I’m talking about in Georgia want relief, and I’m going to do everything I can to get it to them.”

Kelly said Wednesday he was “still working” on getting his bill to the floor.

“This is important,” he said in an interview March 24. “My constituents are paying the highest gas prices ever in Arizona, and it’s really hurting them and their families, and this is one thing we can do that will make a difference.”

Kelly dismissed the notion that it would undermine the Highway Trust Fund, saying the legislation “requires the Treasury to backfill that money.”

“We fixed that,” he said.

While the bill declares the sense of Congress that consumers get the benefit of the tax cut and says the Treasury secretary “may use all applicable authorities” to make sure the benefits go to consumers, critics have said the bill does not include any provision to actually force that to happen.

The federal gas tax, last increased in 1993, comprises about 90 percent of revenue to the Highway Trust Fund, which pays for highways and transit.

But it has lost its buying power as cars have become more fuel-efficient and the tax has remained unchanged. As a result, the bipartisan infrastructure law passed by Congress last year transferred $118 billion from the general fund in order to meet the gas tax shortfall to the Highway Trust Fund.

The federal government already had to transfer more than $270 billion in general revenues to the Highway Trust Fund between 2008 and 2021, according to the Government Accountability Office.

Pelosi’s comments came after Rep. Peter A. DeFazio, D-Ore., chairman of the House Transportation and Infrastructure Committee, said last month that suspending the tax “is not going to give consumers significant relief — if any at all.”

Instead, he said, “suspending the tax will blow a $26 billion hole in the Highway Trust Fund this year and cause further delay in rebuilding our decrepit infrastructure and the tens of thousands of jobs that investment would have provided.”

Lindsey McPherson contributed to this report.