Democrats Pan Joe Biden's Call For A Gas Tax Holiday

Some lawmakers in the president's party are resistant to the idea of temporarily suspending the 18-cent federal gas tax to help alleviate pain at the pump.

Democratic lawmakers are pushing back on President Joe Biden’s call for a gas tax holiday, arguing that oil companies would pocket the savings rather than passing it on to consumers.

The resistance from key members of Biden’s own party highlights the dismal prospects for the proposal in Congress, even as it was eagerly embraced by Democratic governors and other legislators facing tough reelection battles in 2022.

“We can give families just a little bit of relief,” Biden said at a Wednesday afternoon event to pitch his proposal. “I call on the companies to pass every penny of this 18-cent reduction on to the consumers. This is no time for profiteering.”

Earlier in the day, Sen. Tom Carper (D-Del.), the chairman of the Senate Environment and Public Works committee, called the proposal a “shortsighted and inefficient way to provide relief.”

Sen. Mark Warner (D-Va.) also expressed skepticism.

“I’d like to see some of the data and some of the states that have tried that, whether that’s actually resulted in fully lower gas prices,” he said in an interview with HuffPost.

Biden is urging Congress to pass a three-month suspension of the 18.4 cents-a-gallon tax on gasoline and the 24.4 cents-a-gallon tax on diesel. The proposal should be enacted in such a way as to not affect funding for road projects that rely on federal gas tax revenue, he said.

Biden is also calling on more governors to suspend their state gas taxes. Several Republican governors have already moved to do so, including in Maryland, Virginia, and Georgia.

The average price of gas in the U.S. has hovered around $5 a gallon this week. Biden blamed a recent spike in prices on Russian President Vladimir Putin’s invasion of Ukraine and the subsequent sanctions on energy-rich Russia ― an argument with merit, even if gas prices had risen significantly even before the invasion.

“For all those Republicans in Congress criticizing me for high gas prices in America, are you now saying we were wrong to support Ukraine?” Biden said. “Are you saying we would rather have low gas prices in America than Putin’s iron first in Europe?”

A Quinnipiac University poll released Wednesday shows how dominant gas prices have become as a political and economic issue. Nearly two-thirds of Americans said the price of gas is the economic problem worrying them the most right now, compared to just 11% who said the stock market and 3% who said their personal job situation.

And 68% of Americans said the price of gasoline has been at least a somewhat serious problem for their family, while 55% said it caused them to cut back on household spending and 40% said it caused them to change their summer vacation plans.

The pain at the pump has rattled Democrats about their fortunes in the coming midterm elections. Vulnerable Democratic lawmakers, in particular, have been pushing for a federal gas tax holiday for months.

“While I am encouraged that the President now supports a gas tax holiday, I continue to believe that we should seek to suspend the gas tax for at least the rest of the year, not just 90 days,” Sen. Maggie Hassan (D-N.H.) said in a statement on Wednesday. Hassan has made a call for a gas tax holiday a centerpiece of her reelection bid.

Democratic governors, who don’t have a vote on the controversial idea, greeted the proposal in a warmer fashion. Biden praised Minnesota Gov. Tim Walz and Illinois Gov. J.B. Pritzker for offering relief for high prices.

Michigan Gov. Gretchen Whitmer called on Biden to work with Congress to “offer American families real relief at the pump.”

“Getting this done will save Michiganders money right now,” the Democrat said in a video posted to Twitter.

But the opposition within Congress could doom the plan. House Speaker Nancy Pelosi (D-Calif.) has repeatedly dismissed it, calling the move “very showbiz.”

“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,” Pelosi said earlier this year.

Economists have also argued that a gas tax holiday could make inflation even worse. Jason Furman, a former top economic adviser to President Barack Obama, said that consumers are in less of a position to benefit from a gas tax holiday today than they were six months ago because of supply issues.

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