Joe Biden’s call for Congress to suspend the federal tax on gasoline and diesel for three months was met with swift opposition as a blow to the president’s efforts to provide temporary relief to US households struggling with high inflation.
The so-called gas tax holiday proposed by the US president will include the abolition of the federal fee of 18.4 cents per gallon of gasoline and the 24 cent tax on diesel that consumers pay at the pump.
The total cost of the measure will be approximately 10 billion dollars. Biden is asking Congress to replenish the highway trust fund, which is typically funded by these taxes, with other revenue increases.
“It doesn’t reduce all the pain, but it would be a big help. I do my part. I want Congress, the states and industry to do their part, “Biden said in a White House statement Wednesday afternoon.
Some states, including New York and Florida, have taken steps to suspend their own state taxes on gasoline and offer drivers relief from high prices. But Biden is facing a tough battle to adopt a measure at the federal level on Capitol Hill, as Republicans opposed it and Democrats were cool about the proposal.
“What the administration is coming up with, of course, is another trick, another sticker, and something they know is dead when they arrive here in Congress,” John Toon, a Republican senator from South Dakota, told reporters.
“While well-intentioned, this policy will, at best, be a minor relief as it bores a $ 10 billion hole in the highway trust fund,” said Peter DeFazio, an Oregon Democrat and chairman of the House Transportation Committee.
Delaware Democrat Sen. Tom Carper was even more outspoken on Twitter Tuesday night. “I am glad that @POTUS is exploring ways to reduce the price of gas at the pump. However, stopping the main way we pay for infrastructure projects on our roads is a short-sighted and ineffective way of providing relief. “We need to explore other ways to reduce energy costs,” he wrote.
Biden’s call for a gas tax marks the White House’s latest effort to show its determination to do its utmost to curb inflation and reduce energy costs as Ukraine’s war drags on. On Wednesday, Biden attacked critics who said his policies had fueled inflation, saying they had failed to acknowledge that Russia’s invasion was a major driver of rising prices.
“So for all those Republicans in Congress who criticize me today for America’s high gas prices, are you saying now that we were wrong to support Ukraine?” Biden said. “Say we were wrong to face Putin?” Are you saying that we prefer to have lower gas prices in America and Putin’s iron fist in Europe? I do nt believe this.”
In recent months, Biden has released oil from the strategic oil reserve, urged local energy groups to increase production and will travel to Saudi Arabia to talk to a regime that once promised to make a “pariah”.
As gasoline costs rose to about $ 5 a gallon, a suspension of the federal tax would offer only a small respite to troubled consumers. Consumer prices rose at an annual rate of 8.6% last month, worsening Americans’ perceptions of the strength of the US recovery.
Biden was considering a gas tax vacation in February, but gave up. Critics have warned that the policy could backfire, boost demand and contribute to inflation, while failing to provide significant relief to families.
Maya McGuinness, chair of the Committee on Responsible Federal Budget, a non-partisan think tank in Washington, said the petrol tax holiday “will moderately reduce pump prices, but will sharpen overall inflationary pressures and increase demand for energy, which is already insufficient supply ”.
Oil executives are likely to welcome the move, which is a subsidy for their product. The leaders of some of the largest oil and fuel producers in the United States will meet with Energy Secretary Jennifer Granholm on Thursday.
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But high fuel prices have exacerbated tensions between Biden and oil executives. On Tuesday, he attacked Chevron CEO Mike Wirth after saying in a letter to the president that a “change of approach” was needed to lower prices and that the administration should not “blacken” the industry.
Biden called Wirth “sensitive” while urging the industry to increase fuel supplies.
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