President Biden calls on Congress to suspend federal gas tax Transcript

Speaker 1: (00:00)
Breaking news from the Biden administration in the last hour aimed at hopefully easing some of the pain at the gas pump. Eamon Javers joining us now with more. Eamon, good morning.

Speaker 2: (00:11)
Good morning to you, Brian. President Biden is going to propose that Congress end that gas tax through the course of this summer, resuming it in September, so the busy summer driving months will have no gas tax, according to the Biden plan. Here’s what we know as of right now. The president is going to call for Congress to suspend the federal gas and diesel taxes for three months, that is, until September. He’s going to be requesting that states suspend gas taxes or find similar relief, and he’s asking industry to put what the White House calls their record profits to work and not to absorb any benefit that they get from any gas tax holiday. He’s also calling on retailers to promptly lower their prices. Remember, it’s an 18.4 cent per gallon on gas, it’s a 24 cent per gallon on diesel, so that’s a pretty hefty tax that would be coming off under this plan.

Speaker 2: (01:02)
The president’s also calling for no effect here on the Highway Trust Fund, and White House officials briefing reporters yesterday said they think they can do that, because remember there’s been this pretty enormous surplus of tax revenue coming into the government. They say they can repurpose some of that revenue and put it back into the Highway Tax Fund. Of course, the gas taxes go into the Highway Trust Fund, which benefits infrastructure programs around the country. Without that revenue, there’d be some worry that you’d have a lot of potholes to fill. The Biden administration says they have a plan for that.

Speaker 2: (01:33)
But remember, the president here is calling for Congress to do something, he’s not doing it himself. He doesn’t have the power to do it himself, taxation, that’s a power of Congress. So we’ll see whether he has the votes up on Capitol Hill to do that. Some skepticism has been expressed up on Capitol Hill about this. Republicans don’t necessarily want to bail the president out of a political problem, there are some Democrats, progressives who might not like this as well. So we’ll see whether this is a coalition on Capitol Hill to do what the president is going to be calling for. We’ll see him later on this afternoon talking about this on television, guys. Back over to you.

Speaker 1: (02:08)
Okay, well, let’s do the math on this, Eamon Javers. I know it’s early, but let’s do a little math. The average American driver uses about 50 gallons of gasoline a month, so on that basis, you wipe out the federal gas tax, it’ll save the average driver about $9 a month. The price of gasoline has gone up by $2 in the last year, so you wipe that out. The irony, I think, here, is that for years, you had many in politics, mostly on the left, but some on the right as well, suggesting we need to raise the national gas tax, because it has not been raised since, I think, 1993. You back out inflation, that puts it at a real rate of probably 10 to 11 cents a gallon, not 18, adjusted for inflation. So it’s always been the political third rail, has it not? Don’t raise the gas tax. Now we’re talking about suspending it.

Speaker 1: (02:57)
Well, that money for the trust fund has got to come from somewhere. It won’t help a lot with consumer pain, but right now it’s more about the optics, I would imagine, politically, that, “Hey, we’re doing something.”

Speaker 2: (03:10)
Yeah, look, and progressives will say that they want gas taxes to be higher because they want people to get off of gasoline and onto more sustainable fuels, right? So one of the objectives there is to push the taxes as high as they can in order to persuade consumers that the end of the gas vehicle is here, time to switch over to electric and some of these other things. So we’ll see politically how that plays out on Capitol Hill. It could be embarrassing for the president if he does not have the votes for this, he calls for Congress to do something here, Congress doesn’t do it. It might give him the ability to at least point the finger of blame somewhere else, which presidents tend to like to do.

Speaker 2: (03:43)
The other interesting thing here is the timing, of course, going into September. Remember, there’s a midterm election coming up in November, so the president is talking about here now raising-

Speaker 1: (03:52)
What?

Speaker 2: (03:52)
… the tax effectively in September, just ahead of that election. That might not be politically popular either. So there’s some potential for political blowback here for the Biden administration. But clearly they’ve decided it’s better to do something, to be seen as doing something, than to do nothing, and we’ll see-

Speaker 1: (04:06)
Let’s see.

Speaker 2: (04:07)
… whether this actually works its way through the process.