President Joe Biden on Wednesday proposed a series of actions he said could reduce the price of gasoline by $1 per gallon, including a call for a gas tax holiday that was greeted with skepticism by members of Congress — including some in his own party.
Biden called for Congress to pass legislation that would suspend both the 18-cents-per-gallon tax on unleaded gasoline and 24-cents-per-gallon diesel tax for the next 90 days. While the tax is used to replenish the Highway Trust Fund, Biden said the recent reduction in the deficit would allow the federal government to suspend the tax without affecting infrastructure funding.
Biden similarly called on states to suspend their gas taxes or find other ways to reduce the cost to consumers, noting actions in Connecticut, New York and Illinois that have either created gas tax holidays or delayed implementation of increases.
In order to address supply to help lower pump prices further, Biden also called on companies to increase refining capacity. Energy Secretary Jennifer M. Granholm is scheduled to discuss that with executives from BP, Chevron and other oil companies on Thursday.
The oil industry lobby, the American Petroleum Institute, has complained along with Republicans that Biden administration policies discourage the production of motor fuel in an effort to slow the progress of global warming from carbon emissions. The administration has responded that the industry has plenty of production capacity that it's not using.
"If Washington is serious about delivering relief to consumers, then they should be focused on policies that encourage increased U.S. production and address the global mismatch between energy demand and available supply," said Frank Macchiarola, a senior vice president at API.
As Biden spoke, the national average for a gallon of gasoline was $4.95, according to AAA. He laid blame for the high gas prices largely on the Russian invasion of Ukraine and subsequent moves by the U.S. and others to bar Russian oil and natural gas imports.
“For all the Republicans in Congress criticizing me today for high gas prices in America, are you now saying we were wrong to support Ukraine? Are you saying we were wrong to stand up to Putin?” said Biden. “Are you saying that you would rather have lower gas prices in America than Putin’s iron fist in Europe? I don’t believe that.”
Some Democrats in Congress began calling for a federal gas tax holiday earlier this year in response to rising prices. Rep. Tom O’Halleran, D-Ariz., introduced legislation in February that would suspend the gas tax through the end of the year. The bill has 21 co-sponsors, many from competitive districts. Sen. Mark Kelly, D-Ariz., introduced a similar bill in the Senate.
“This gas tax suspension would put money directly back into their pockets, lower shipping costs, and help address inflation — I encourage the president to extend his suspension ask to the end of this year,” O’Halleran said in a statement.
However, Speaker Nancy Pelosi expressed skepticism over a gas tax holiday in March and instead proposed consumer rebate cards or direct payments. In response to Biden’s call, she said leadership will see “where the consensus lies.” House Majority Leader Steny H. Hoyer, D-Md., said he did not know if the proposal would have the necessary support, noting some Democrats have voiced doubts.
Among those are House Transportation and Infrastructure Chair Peter A. DeFazio, D-Ore., who announced his opposition to the suspension and called for the House to take up his bill that would place an excise tax on oil companies’ windfall profits.
“Although well-intentioned, this policy would at best achieve only minuscule relief while blowing a $10 billion dollar hole in the Highway Trust Fund that would need to be filled if we want to continue to fix crumbling bridges, address the spike in traffic deaths, and build a modern infrastructure system,” DeFazio said in a statement.
Senate Energy and Natural Resources Chairman Joe Manchin III, D-W.Va., told ABC News he was concerned about putting a “hole” in the budget.
Republicans swiftly condemned the proposal and renewed their calls for the administration to expand U.S. oil exploration. House Energy and Commerce ranking member Cathy McMorris Rodgers, R-Wash., said suspension of the gas tax will be “ineffective and would undermine funding to infrastructure projects for road safety.” Senate Minority Leader Mitch McConnell referred to it as an “ineffective stunt.”