Democrats are sticking with Biden’s gas tax vacation plan

Congressional Democrats yesterday had a mixed reaction to a White House-backed proposal to temporarily suspend state gas taxes, with some citing fears it would do little to help consumers.

Lawmakers will likely face the prospect in the coming days. Senior administration officials familiar with the plan told E&E News yesterday that President Joe Biden plans to announce his decision later today to support a pause on the 18.4-cent-a-gallon tax through the end of September. The aim is to cool down the rising petrol prices.

The suspension of the gas tax would have to be approved by Congress. It was an idea floated by moderate Democrats in recent months as prices have soared.

But it might be difficult to get Congress to agree on the matter. Most Republicans and even some Democrats see the idea as a gimmick that would do little to mitigate recent price shocks.

Rep. Peter DeFazio (D-Ore.), chairman of the House Transportation and Infrastructure Committee, reiterated his displeasure with such a move and issued a statement urging Democrats to “see what it is: a short-sighted proposal, which relies on oil companies working together to pass tiny savings on to consumers — the same oil companies that generated record profits last year and a whopping $35 billion in the first quarter of 2022.”

Fears have grown that a pause could also undermine the highway trust fund, which derives most of its income from the tax to improve roads and bridges.

Sen. Tom Carper (D-Del.), Chair of the Environment and Public Works Committee, wrote in a tweet last night that “suspending the primary way we pay for infrastructure projects on our roads is a short-sighted and inefficient way to remedy the situation.” He added, “We should explore other options for reducing energy bills.” check.”

A senior administration official said the White House will also ask states to suspend their own gas taxes.

In fact, as prices rose, several states introduced gas tax exemptions, including Maryland, Georgia, Connecticut, New York and Florida. Other states are considering implementing their own approach.

In the case of Maryland, the pause was engineered to ensure the relief benefits consumers and not just gas stations, Sen. Ben Cardin (D-Md.) told reporters yesterday.

“I think it provided temporary relief, but it didn’t provide lasting relief,” Cardin said. “And it impacted Maryland infrastructure funding, so it’s been mixed results.”

Biden yesterday downplayed the impact a pause could have on federal infrastructure dollars. He said the $1.2 trillion infrastructure bill passed by Congress last year gave enough federal dollars to provide some cushion for federal improvement funds.

“Look, it’s going to have some impact, but it won’t impact major road construction and major repairs,” Biden told reporters. “Is it really going to be difficult to maintain our roads? The answer is: We have enough capacity for it.”

Vulnerable Democrats like Sens. Mark Kelly (D-Ariz.) and Maggie Hassan (DN.H.) introduced a proposal, SB 3609, to suspend the gas tax earlier this year, but their bill has seen little movement.

Some progressive Democrats have been open to the idea of ​​imposing a windfall tax on oil and gas company profits. DeFazio has put forward a proposal, Stop Gas Price Gouging Tax and Rebate Act, HB 7099, which would then apply the proceeds as a rebate to consumers.

Senate Treasury Chairman Ron Wyden (D-Ore.) is working on his own windfall tax, which he plans to implement in the coming weeks. He told reporters yesterday that he remains open to considering the White House proposal for a gas tax holiday but wants to make sure any policy is pursued by the industry, not the consumers.

“I’m all for making sure consumers get some relief at the pump because they’re about to be mugged,” Wyden told reporters.

While Democrats think the idea of ​​the tax holiday is cool, Republicans said yesterday they see little incentive to bail out the White House in a bind they blame the Biden administration for.

“President Biden needs to stop deviating from his failed policies and actually focus on unleashing American energy and technological innovations that will meet our energy needs and lower gas prices,” said Cathy McMorris Rodgers (R-Wash.), a member of Energy’s rankings and Commerce.

Reporter Carlos Anchondo contributed.

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