Officials in the Biden administration are debating the merits of suspending the federal fuel tax, The Washington Post’s Tony Romm and Jeff Stein report.
A group of Democratic senators released a bill last week that would suspend the federal fuel tax of 18.4 cents per gallon of gasoline for the remainder of 2022, and White House officials are considering backing the plan as a way to provide relief for households facing a wave of inflation that is more powerful and more persistent than expected – potentially a serious political problem in an election year.
At a lunch meeting Tuesday, Senate Democrats discussed the proposal. Sen. Tammy Duckworth (D-IL) said the lawmakers seemed to "really like” the idea of lowering taxes on gas or other essentials. Majority Leader Chuck Schumer told reporters that he expects to take concrete steps soon. “We are focused on getting costs down and you’re going to see a lot of activity in March from us on that issue,” he said.
But the White House isn’t sold on the plan yet. Officials worry that the tax holiday might end up padding the profits of fuel companies more than helping consumers, and it could be difficult to reinstate the tax somewhere down the road.
And there are plenty of critics of the plan. Republican Sen. John Thune (SD) described the proposal as “a desperate cry for help. I think they realize that they’re on the wrong side of the energy issue, the wrong side of the inflation issue.”
Democratic Sen. Joe Manchin (WV) said he was concerned about the effect a tax holiday would have on funding for highway construction and repair. “People want their bridges and their roads, and we have an infrastructure bill we just passed this summer, and they want to take that all away," he told reporters. “It just doesn’t make sense.”
And former Treasury secretary Larry Summers, who has been critical of Democrats’ approach to spending and inflation, said that the gas tax holiday was “short-sighted, ineffective, goofy and gimmicky.”
“It’s terrible policy at a moment we’ve labeled climate change as an existential threat,” Summers said.
