U.S. President Joe Biden will ask the U.S. Congress on Wednesday to approve a three-month suspension of the federal gasoline tax to help combat record prices at the pump, according to a senior US government official. US government.
The US president will also ask states across the country to temporarily suspend their fuel taxes, which are typically higher than federal taxes, the source said, and will challenge major oil companies to come to a meeting with their secretary of state. Energy later this week with ideas on how to bring back idle refining capacity.
Biden and his advisers have been discussing the issue for months amid mounting pressure for action to deal with record gasoline prices, which have weighed on the president’s popularity ratings and cast a dark cloud over Democrats’ chances of winning. retain power in Congress in the November elections.
Suspension of the federal gasoline tax of 18.4 cents per gallon and the diesel tax of 24.4 cents would require congressional approval, which would likely make Biden’s support for this initiative largely symbolic.
Lawmakers from both parties with representation in the legislative chamber have expressed resistance to suspending the tax, and some Democrats, such as House Speaker Nancy Pelosi, fear the measure will have a limited effect on prices and that oil companies and retailers pocket much of the savings.
“The suspension of the federal tax on gasoline will not by itself solve the problem we face, but it will provide families with a little respite while we continue to work to reduce prices in the long term,” said a second government source.
Biden will ask Congress to suspend the fuel tax through September, a move that will cost the Highway Trust Fund some $10 billion in foregone revenue, the source said. The White House believes it can make up for lost revenue with other areas of a budget than recording revenue growth and shrinking deficits as the United States emerges from the COVID-19 pandemic.
Some states, such as New York and Connecticut, have already suspended state fuel taxes, while others have toyed with ideas such as consumer rebates and direct rebates.
News of Biden’s announcement — which will come in an afternoon speech — first broke Tuesday night.
Refiners are struggling to meet global demand for diesel and gasoline, exacerbating prices and shortages.
Prices at pumps in the United States are approaching 5 dollars a gallon, as the increase in fuel demand coincides with the loss of about a million barrels per day of processing capacity. In the last three years, many plants have been closed when the demand for fuel plummeted in the midst of the COVID-19 pandemic.