Biden asks Congress to pause gas tax to help lower record pump prices & More news

 

WASHINGTON, June 22 (Reuters) – U.S. President Joe Biden on Wednesday called on Congress to pass a three-month suspension of the federal gasoline tax to help combat record pump prices and provide temporary relief for American families this summer.

“We can bring down the price of gas and give families just a little bit of relief,” Biden said in a White House address.

The president also urged states to temporarily suspend state fuel taxes, which are often higher than federal rates, the official said, and will challenge major oil companies to bring ideas on how to bring back idled refining capacity when they meet with his energy secretary on Thursday.

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Biden and his advisers have been discussing the issue for months amid increasing pressure to act as record-high gas prices weigh down the president’s poll ratings and cast a dark cloud over Democrats’ chances of retaining congressional power in November’s elections.

A suspension of the 18.4 cents per gallon federal gasoline tax and 24.4 cent diesel tax would require congressional approval, likely making Biden’s pitch largely symbolic.

Lawmakers in both parties have expressed resistance to suspending the tax, with some Democrats, including House of Representatives Speaker Nancy Pelosi, worried the move could have limited effect on prices if oil companies and retailers pocket much of the savings.

Biden asked Congress to suspend the fuel tax through September, a move that will cost the Highway Trust Fund roughly $10 billion in forgone revenue but could be made up from other areas of a budget that is seeing revenue grow and deficits shrink as the United States emerges from the COVID-19 pandemic.

Peter DeFazio, a Democrat and the chair of the House Committee on Transportation and Infrastructure, told reporters Wednesday a federal gas tax holiday would provide “miniscule relief” while blowing a budget hole in a Highway Trust Fund needed to fix crumbling bridges and build a modern infrastructure system.”

Some states, such as New York and Connecticut, have already paused state fuel taxes, while others have floated ideas such as consumer rebates and direct relief.

Refiners are struggling to meet global demand for diesel and gasoline, exacerbating high prices and aggravating shortages. read more

“Pausing the federal gas tax will certainly provide near-term relief for U.S. drivers, but it won’t solve the root of the issue – the imbalance in supply and demand for petroleum products,” a spokesperson for the American Fuel and Petrochemical Manufacturers industry group said.

Longer-term policies are still needed to boost U.S. energy production, it said.

U.S. pump prices are averaging near $5 a gallon as soaring demand for motor fuels coincides with the loss of about 1 million barrels per day of processing capacity. In the last three years many plants were closed when fuel demand cratered at the height of the pandemic. read more

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Reporting by Jarrett Renshaw; additional reporting by Katharine Jackson; Editing by Susan Heavey, Nick Zieminski and Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

 

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