NBC News ----------- President Joe Biden on Wednesday will call on Congress to pass legislation creating a federal tax holiday on gas and diesel fuel for three months in an effort to lower prices for consumers at the pump, according to senior administration officials.
The request would mark the most significant effort yet by the president to try and bring down gas prices. But it is likely to face GOP opposition on Capitol Hill.
The pause would trim 18 cents off each gallon of gas and 24 cents for diesel at a time when the summer driving season is getting underway. The legislation would cost an estimated $10 billion, a senior administration official told reporters on a call.
“With our deficit already down by a historic $1.6 trillion this year, the president believes that we can afford to suspend the gas tax to help consumers while using other revenues to make the Trust Fund whole for the roughly $10 billion cost,” the official said.
Officials said Biden would ask Congress to make the temporary adjustment in a way that doesn't harm the Highway Trust Fund, which gets its revenue from fuel taxes. Many lawmakers, mostly on the Republican side of the aisle, have cited the trust fund as a reason why they wouldn't back a tax holiday, though some congressional Democrats have also been critical of a gas tax holiday.
How federal gas tax holiday could work as Biden considers possibility
Democrats are facing significant political headwinds just months away from the November midterm elections, as numerous polls show gas prices and inflation are top concerns for voters.
Biden is scheduled to deliver remarks Wednesday at 2 p.m. on gas prices and what his administration has dubbed “Putin’s price hike,” referring to Russian President Vladimir Putin.
During those remarks, Biden also plans to call on state and local governments to provide additional consumer relief by pausing state sales tax on gas or similar actions, senior administration officials said.
Several states have previously implemented their own tax holidays.
According to AAA data on Tuesday, the national average price was $4.96, with higher prices in parts of the West Coast and Midwest.
The administration's new effort comes after Biden said Monday that he was seriously considering halting the federal gas tax as the White House looks to take steps to lower the cost at the pump ahead of the July 4 holiday.
Energy Secretary Jennifer Granholm, who is expected to meet with oil refining executives on Thursday, told CNN's "State of the Union" that “part of the challenge with the gas tax, of course, is that it funds the roads.”
When asked about the potential impact on infrastructure plans, Biden told reporters Tuesday that "it’s not going to be impact on major road construction and major repairs."
Biden's push for a gas tax pause would come months after his administration stepped up its actions to combat gas prices in April by releasing 1 million barrels daily from the Strategic Petroleum and issuing an emergency waiver to suspend a summer ban on the use of a specific ethanol blend of fuel.