Current gas prices have most people dreading a stop at the pump and rethinking those plans of a summer road trip. With the nationwide average gas price sitting at $4.96 per gallon, President Biden is looking for ways to lower gas prices.
Biden has already released some of the strategic petroleum supply to the market and has been calling for the oil companies to ramp up production. Additionally, there are meetings being set with the CEOs of major oil companies to discuss gas prices, and a future trip for Biden to travel to Saudi Arabia where undoubtedly, the topic of increasing oil production will come up.
Another way Biden is looking to potentially lower gas prices is a gas tax holiday. Biden plans to temporarily pause this tax for the next three months to hopefully relieve some pressure from the pockets of consumers, although without Congressional approval, this suspension cannot take place.
"I'm calling on Congress to suspend the Federal gas tax for the next 90 days, through the busy summer season, busy travel season," Biden said.
Will the tax break actually help?
With the federal gas tax set at 18.4 cents per gallon, consumers would only save around 3.6 percent per every tank of gas, and that savings only happens if the full 18 cents is passed down to the consumers.
Though Biden is calling on the oil companies to pass these savings on to the consumers, his pleas may be falling on deaf ears.
During his 2008 presidential campaign, Barack Obama warned that a gas tax holiday could result in the oil companies increasing their prices and offsetting any tax relief.
Many economists and lawmakers – both Democratic and Republican – are wary of the gas tax holiday, as they don’t believe it will do much to help consumers.
Rep. Peter DeFazio, chair of the House Committee on Transportation and Infrastructure, noted his concerns.
"Although well-intentioned, this policy would at best achieve only minuscule relief while blowing a $10 billion dollar hole in the Highway Trust Fund that would need to be filled if we want to continue to fix crumbling bridges, address the spike in traffic deaths, and build a modern infrastructure system."
Though the gas taxes make up a large portion of the revenue for the Highway Trust Fund, administration officials claim the $10 billion cost of the gas tax holiday would be paid for.
