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President Joe Biden will call on Congress on Wednesday to suspend federal gas tax until September as Americans across the country face rising prices as a bomb.
The president will urge members of Congress to institute a three-month federal gas tax holiday period without withdrawing money from the Highway Trust Fund that finances roads and public transportation.
Gas prices have skyrocketed 50% nationwide over the past year. (Getty Images / Getty Images)
“I want to be very clear, the president is asking Congress to take this step to help American families without harming the Highway Trust Fund, which is funded by these taxes,” a senior administration official said Tuesday evening.
The official suggested that the $ 1.6 trillion federal government budget deficit, which is reduced by $ 1.6 trillion this year, allows the United States to suspend gas tax while using other revenue to supplement the highway trust fund for a cost approximately $ 10 billion.
In 2008, OBAMA called the gas tax holiday a “trick” such as Biden says it is considering.
The federal government currently charges 18 cents per gallon of gas and imposes a 20 percent tax on every gallon of diesel, the official said.
Biden will also call on states, oil companies and retailers to pause gas taxes. Penn Wharton’s budget model on Wednesday released estimates that tax holidays in Georgia, Maryland and Connecticut saved consumers money on the bomb. Most of the savings in these areas went to consumers instead of service stations and others in the energy sector.
The cost of gas began to rise last fall and continued to rise after that of Russia invasion of Ukraine in late February, though the administration is framing the rise in gas prices as Putin’s “price hike.”
“[Biden] He believes that states, oil companies and retailers have the sole responsibility at this time: to do their part to improve Putin’s price increase, “he said. or that they would otherwise find other ways to offer the same. relief, such as consumer discounts or relief payments. “
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Gasoline prices are around $ 4.00 a gallon for the cheapest category at several gas stations in the country’s capital on April 11, 2022 in Washington, DC. (Photo by Chip Somodevilla / Getty Images / Getty Images)
The official also said that the president is pushing for the gas industry and oil retailers to reduce the price of gas as oil prices begin to fall.
“It also calls on the industry to implement its record profits and increase with more supply and more refining capacity to reduce gas prices and specifically calls for large oil refineries to come to the table with concrete solutions when the secretary of Energy is summoning them later this week, “the official said.
“And when the cost of oil goes down as it has done in recent weeks, the president is asking retailers to lower their prices properly and pass the savings on to consumers,” the official continued.
The national average for a gallon of gasoline is currently close to $ 5. Earlier this year, the highest national average gas price ever recorded by AAA was $ 4,114 per gallon in July 2008.
The president accused oil refineries of raising gas prices in letters sent last week to seven refinery operators, including Chevron, ExxonMobil and BP. But oil refineries have said their capacity to produce additional gas and diesel is limited.
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Fuel prices at a Chevron station in San Francisco, California, USA, Thursday, June 9, 2022. (David Paul Morris / Bloomberg via Getty Images / Getty Images)
The American Petroleum Institute and American Fuel & Petrochemical Manufacturers sent a joint letter to Biden last week saying the refineries are already operating close to full capacity and nearly half of the offline capacity is due to the facilities. Which become renewable energy production.
And Chevron CEO Michael Wirth wrote a letter to Biden Tuesday noting that the company is working every day to “help provide the world with the energy it needs and improve the lives of billions of people who depend on it.” these supplies “.
He continued: “Despite these efforts, their administration has largely tried to criticize, and sometimes vilify, our industry. These actions are not beneficial in meeting the challenges we face and are not what the people of the north are doing. American deserves it. ”
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Energy Secretary Jennifer Granholm will meet with the top seven refineries later this week on how the federal government can help increase refining capacity.
Former Biden chief Barack Obama described the gas tax as a “trick” to the 2008 election campaign. Gasoline was a “trick” to saving Americans half a tank of gasoline over the summer so lawmakers could “say they did something.”
There is also concern about the impact of a gasoline tax on record inflation. The Committee for a Responsible Federal Budget, a non-partisan group advocating for the reduction of the federal budget, he argued that the 10-month tax suspension could increase demand for gasoline and other goods and services when the economy is already facing high consumer demand and pandemic-induced supply chain disruptions .
“While the gas tax holiday may reduce pump prices, it will further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it.” said the blog post. “The result could be even higher inflation rates in 2023.”