Biden officially backs gas tax holiday

President Biden on Wednesday officially backed the suspension of both federal and state taxes on gasoline amid soaring fuel prices.

“Today, I’m calling on Congress to suspend the federal gas tax for the next 90 days through the busy … travel season,” Biden said at the White House. 

“But we can also cut gas prices even more in another way. That’s why the second action I’m taking is calling on states to either suspend the state gas tax as well or find other ways to deliver some relief,” he added. 

The federal gasoline tax is 18 cents per gallon, while state gas taxes average about 26 cents per gallon, according to the American Petroleum Institute. 

Biden also alluded to cuts to the 24 cent federal tax on diesel. 

His federal effort, however, is likely to face high hurdles in Congress amid skepticism from both Republicans and members of his own party.

Opponents have raised concerns about whether the suspension will be effective — saying some of the cut may not get passed to consumers — and have also noted that the taxes the government collects goes toward the Highway Trust Fund, which helps pay for the country’s infrastructure needs. 

Biden sought to assuage those concerns in his speech, arguing it’s possible to address highway funding at the same time and calling on companies to pass the potential suspension to consumers.

“With the tax revenues up this year and our deficit down over $1.6 trillion this year alone, we’ll still be able to fix our highways and bring down prices of gas, we can do both at the same time,” he said. 

“I call on the companies to pass this along — every penny of this 18 cent reduction — to the consumers. There’s no time now for profiteering,” he added. 

In a White House press briefing on Wednesday, Energy Secretary Jennifer Granholm estimated that the highway trust fund would be hit by about $10 billion, but said that Biden is asking “that the trust fund be repaid.”

She added that he was having conversations with Congress about how to do that. 

In the same briefing, Biden press secretary Karine Jean-Pierre told reporters that “this is just the beginning of the process,” when asked about the proposal’s prospects on Capitol Hill.

In his speech, Biden also acknowledged that gas tax suspensions won’t entirely resolve high prices — as gasoline averaged around $4.96 nationwide on Wednesday, but still said they would provide important savings. 

“I fully understand that a gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief, just a little bit of breathing room, as we continue working to bring down prices for the long haul.”

The president on Wednesday also called for refiners to turn more crude oil into gasoline; refiners can make crude into a range of products that also include diesel or jet fuel.

“I’m calling on the industry to refine more oil into gasoline and to bring down gas prices,” he said. 

His comments come as Granholm prepares to meet with industry executives this week. Ahead of that meeting, Chevron CEO Mike Wirth criticized what he described as Biden administration efforts to “vilify” the industry.

Biden said he hopes this meeting spurs near-term solutions to reduce prices. 

Speaker Nancy Pelosi (D-Calif.), who in the past expressed reservations about a gas tax suspension, said, “We will see where the consensus lies on a path forward” in a statement on Biden’s announcement. 

Meanwhile, Republicans have also expressed opposition to the idea — with Senate Minority Leader Mitch McConnell (R-Ky.) calling it an “ineffective stunt” in a statement. 

— Morgan Chalfant contributed. Updated at 4:42 p.m.