Biden Calls for ‘Gas Tax Holiday’ in Bid to Kneecap Inflation Woes

June 22, 2022 by Dan McCue
Biden Calls for ‘Gas Tax Holiday’ in Bid to Kneecap Inflation Woes
High gas prices are shown as a pedestrian waits to cross the street in Los Angeles, June 16, 2022. President Joe Biden on June 22 will call on Congress to suspend the federal gasoline and diesel taxes for three months. (AP Photo/Jae C. Hong, File)

WASHINGTON — President Joe Biden on Thursday called on Congress to suspend the federal tax on gas and diesel for three months to provide some relief to soaring inflation and surging prices at the pump.

The federal gas tax holiday the president is seeking would suspend the 18.4-cent federal tax on every gallon of gasoline and the 24-cent tax on every gallon of diesel consumers buy through September.

The White House is estimating that the cost of such a move would be about $10 billion. Along with the tax moratorium, the president is also asking Congress to replenish the highway trust fund — which is normally funded through those tax revenues — with other revenue increases.

At the same time, Biden is calling on states to take similar action to provide some direct relief, whether suspending their own gas taxes or helping consumers in other ways.


Though he has far less direct influence on state governments, Biden pointed to New York and Connecticut, where the governors have temporarily suspended gas taxes, and Colorado and Illinois, where governors have delayed planned tax and fee increases, as examples of what he’d like to see more of.

States like Michigan and Minnesota are also considering other forms of consumer relief, including temporary suspensions and pauses on state sales tax on gas to consumer rebates and relief payments. 

“President Biden understands that a gas tax holiday alone will not, on its own, relieve the run-up in costs that we’ve seen,” the White House said in a fact sheet on Wednesday. “But the president believes that at this unique moment when the war in Ukraine is imposing costs on American families, Congress should do what it can to provide working families breathing room.”

According to AAA, the average price of regular gas in the U.S. Wednesday morning was $4.95 a gallon, with mid-range gas coming in at $5.36 a gallon, and premium, at $5.66 a gallon. The price of a gallon of diesel fuel, meanwhile, was $5.81 a gallon.

On a regional basis, consumers in the West were bearing the brunt of the gas price increases, while consumers in the Southeast were getting hurt far less. In California, for instance, the average price of a gallon of regular gas Wednesday was $6.37, while the same gallon of gas cost Georgians $4.50 a gallon.

The president’s call for a gas tax holiday marks the latest effort by the White House to show its determination to do everything possible to tame inflation and bring down energy costs against the backdrop of the ongoing war in Ukraine which is inspiring widespread concerns about energy and energy costs both here and in Europe.

In recent months, Biden has released oil from the strategic petroleum reserve, tried to get domestic oil and gas companies to increase production, and even announced that he will travel to Saudi Arabia next month for talks with Crown Prince Mohammed bin Salman, a man he once denounced as a “pariah” due to his role in the murder of dissident journalist Jamal Khashoggi.

The trip will begin in Israel on July 13 and continue for four days.


While in the Middle East, the president  “will also meet with counterparts from across the region to advance U.S. security, economic, and diplomatic interests,” White House press secretary Karine Jean-Pierre said in a statement announcing the trip. 

But not everyone is happy about Biden’s call for a gas tax holiday, and others have expressed some hesitency over the proposal.

During a pen and pad session with reporters on Wednesday, House Majority Leader Steny Hoyer acknowledged that House Democratic leaders have expressed reservations about imposing a federal gas tax holiday in the past and that some on the Democrat’s side of the aisle oppose it.

“We all agree that the price at the pump is hurting working Americans, and frankly there’s a lot of sticker shock out there, but the question we’re all trying to answer is how we can save the consumer money in a meaningful way,” Hoyer said.

“Now, the president has made a proposal and I am certainly going to look at it sympathetically in the sense that I know what the president is trying to do is achieve a good objective,” he continued. “What I’m not sure about is whether it will have the intended effect, which is to drive the retail price at the pump lower.

“If we eliminate the gas tax for 90s days and the price stays at $5 a gallon, that doesn’t help the consumer. So that’s what I’m looking at. But the president has proposed it. He’s thought about it, and we’ll see,” Hoyer said.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a non-partisan think-tank in Washington, said in a written statement Wednesday that the move “would modestly reduce prices at the pump but exacerbate overall inflationary pressures and increase demand for an energy source already short in supply.”

“Inflation is surging at the fastest pace in four decades, and policymakers need to start taking that seriously,” MacGuineas said, adding that other initiatives, like canceling student debt or extending the current payment pause will only “worsen inflation while delivering substantial benefits to higher-income Americans and driving up future tuition costs.”

“Together, these policies could cost the federal government $250 billion or more over a decade at a time when debt is already headed toward record levels. These policies aren’t solutions; they are gimmicks that shift costs on to taxpayers and consumers,” she said.

“Instead of making the Federal Reserve’s job harder, Congress and the president should be working to assist the Federal Reserve in its inflation-fighting efforts. A reconciliation bill that boosts tax revenue, lowers drug costs, and reduces deficits would represent an important step in the right direction,” she continued.


“Deficit-boosting legislation is part of how we got into this mess; it’s not going to get us out of it. The White House should put an end to ongoing COVID relief and focus its attention on deficit-reducing legislation,” MacGuineas said.

Dan can be reached at [email protected] and at https://twitter.com/DanMcCue.

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