Biden to call for three-month suspension of federal gas taxes

Says resulting $10 billion hole in Highway Trust fund can be filled

President Joe Biden will ask Congress to suspend federal gas taxes. (Nicholas Kamm/AFP via Getty Images)
President Joe Biden will ask Congress to suspend federal gas taxes. (Nicholas Kamm/AFP via Getty Images)
Posted June 22, 2022 at 5:00am

President Joe Biden on Wednesday will call on Congress to suspend federal gas taxes through September in an effort to take some of the sting out of high gas prices.

The president will be asking for legislation to suspend both the roughly 18-cents-per-gallon tax on unleaded gasoline and the roughly 24-cents-per-gallon diesel tax for three months, according to senior administration officials.

"I want to be very clear, the president is calling on Congress to take this step to help American families without harming the Highway Trust Fund, which is funded by these taxes. With the deficit already down by a historic $1.6 trillion this year, the president believes we can afford to suspend the gas tax and help consumers while using other revenues to make the trust fund whole for the roughly $10 billion cost," one of the officials said.

Biden himself told reporters Tuesday that he did not foresee a gas tax holiday causing significant disruptions to infrastructure spending given the enactment of the bipartisan infrastructure law. He said it would not be "impacting major road construction and major repairs."

But Biden's allies on Capitol Hill with longstanding interests in infrastructure policy expressed skepticism ahead of the announcement of the White House proposal.

"I'm glad that @POTUS is exploring ways to lower gas prices at the pump. Still, suspending the primary way that we pay for infrastructure projects on our roads is a shortsighted and inefficient way to provide relief," tweeted Senate Environment and Public Works Chairman Thomas R. Carper, D-Del., "We should explore other options for lowering energy costs."

And Rep. Peter A. DeFazio, the chairman of the House Transportation and Infrastructure Committee, in a statement called the idea of a gas tax suspension "short-sighted" in part because "it relies on the cooperation of oil companies to pass on minuscule savings to consumers — the same oil companies that made record profits last year and a staggering $35 billion in the first quarter of 2022."

The same senior administration official said that Biden hopes oil companies and retailers, as well as states and the federal government, will contribute to the effort to lower prices for consumers, given the effects that Russia's war in Ukraine is having on energy markets.

"He's calling on states to suspend their gas taxes, or else find other ways to deliver the same relief, such as consumer rebates or relief payments, building on action states like Colorado, Connecticut, Michigan, Minnesota and New York have taken or are currently considering," the official said.

No climate retreat

The official, speaking on condition of anonymity ahead of the president's formal announcement, said that the new proposal should not be viewed as a drawback from the Biden administration's broader climate goals.

"It's a recognition of the really unique moment that we are in due to Putin's invasion of Ukraine and the destabilization of energy markets in the short-term and the impact that it's having in pain for people at the pump," the official said. "And so the President believes we should be taking every possible measure to alleviate that near-term pain, while also continuing to ... very actively pursue efforts to ensure a successful clean energy transition."

The White House has also pointed to the efforts to engage with energy industry executives, including Thursday's scheduled meeting between Energy Secretary Jennifer Granholm and CEOs of several key oil and refinery companies.

Asked Tuesday about comments in a letter from Chevron CEO Mike Wirth about Biden administration's efforts "to criticize, and at times vilify" the fossil fuel industry, the president said, "He's mildly sensitive. I didn't know they’d get their feelings hurt that quickly."

"Look, we need more refining capacity," Biden said. "This idea that they don't have oil to drill and to bring up is simply not true."