A gas tax holiday to save Americans money at the pump
Summer is here, and so is the driving season. President Joe Biden called on Congress and energy companies to impose a three-month gas tax holiday. His idea would suspend federal gasoline and diesel taxes, saving Americans roughly 3.6% at the pump. He also called on states to suspend state gas taxes to provide more relief. Several states have already put this into place.
This isn’t the first time Biden has tried to cut gas prices – including the order to release 1 million barrels of oil per day, for six months, from the nation’s strategic petroleum reserve. His efforts so far have done little to decrease the price at the pump, and he risks the same with the tax holiday idea. The cost of gas still moves up and down as the demand changes.
The American Automobile Association (AAA) has reported a nationwide gas price average at just below $5 a gallon, and is considered to be dropping. “The recent high prices may have led to a small drop in domestic gasoline demand as fewer drivers fueled up last week,” said Andrew Gross, AAA spokesperson. Prices are projected to be increasing due to an increase in demand for the busy Fourth of July weekend.
The President’s gas tax holiday is being questioned by Congress and economists, even from within his own party. Two senior Democratic leaders have shot this down in the past. House Speaker Nancy Pelosi and former President Barack Obama have been against the idea in the past. In 2008, Republican Candidate John McCain called for a tax holiday, but it was “to get them through an election,” Obama said at a campaign rally. Now, Obama’s former Vice President is pushing for the gas tax holiday. Pelosi worries that suspending gas taxes would allow only oil companies to benefit with no guarantee on consumer savings.
On the contrary, Senate Republican Mitch McConnell said, “This ineffective administration’s big new idea is a silly proposal that senior members of their own party have already shot down well in advance.” This was once a Republican idea, and a gas tax holiday could help Biden’s approval ratings during this midterm election year.
This risky move from Biden could raise another issue: Gas tax goes towards the nation’s Highway Trust Fund. A three-month holiday would cost American infrastructure $10 billion. Today, Biden claims he has a plan to save consumers money at the pump and keep our Highway Trust Fund going strong.
Many states have reported a surplus in cash balances due to the federal pandemic aid. Biden has called on the states to double up on his efforts to provide even more relief and utilize that surplus of pandemic aid. He also called on oil companies to lower their prices. “Bring down the price at the pump to reflect the price you’re paying for the barrel. Do it now! Do it today!” Biden believes the oil companies can take a hit on their profits to benefit the American people. He judged the companies to be making “more money than God.” Oil companies have taken this as an insult and seek support in finding other ways to help gas prices.
Oil companies are scheduled to meet Thursday with the White House Energy Secretary Jennifer Granholm to discuss ways to increase supply instead of lowering prices. “Our goal is to make sure that we have a sit-down conversation where we come up with solutions.” Biden is not planning on sitting in on the meeting but addressed the attendees in his speech today.
Biden hopes to seek answers and see change by the end of this week.