White House, Dems discussing pause in federal gas tax

WASHINGTON (Reuters) — The White House and Democratic congressional leaders are discussing a pause on federal taxes on gasoline to help offset rising prices, lawmakers said Tuesday.

“We’re having a caucus discussion on it. We haven’t yet taken a caucus position but it’s one of many things we’re looking at in terms of reducing costs,” Senate Democratic Leader Chuck Schumer said.

Asked about the issue, the White House said, “Every tool is on the table to reduce prices.” While Biden has already released 50 million barrels from the nation’s petroleum stockpile, “All options are on the table looking ahead,” the White House added.

Biden said he was going to “work like the devil to bring gas prices down.”

“The idea here is to suspend the federal gas tax … for the rest of this year for consumers across the country. It’s a pretty obvious thing to do,” Sen. Mark Kelly said after a closed-door lunch with fellow Democrats that focused on ways to bring down the prices of consumer goods. Last week, Kelly and five other Senate Democrats proposed temporarily suspending the federal 18.4 cent-a-gallon gas tax through the end of the year.

The federal gas tax, which is used to fund maintenance and repairs on interstate highways, has not been raised since 1993 and has lost about 50% of its value in real terms. Some lawmakers expressed concern about the impact on highway repairs from suspending funding for road repairs.

Midterm elections in November will determine whether Democrats maintain their razor-thin majorities in the U.S. Congress. Gasoline costs $3.49 per gallon on average in the United States, up from $2.50 on average a year ago, data from the automobile group AAA showed on Tuesday, with the West Coast and New England seeing the highest coasts.

Schumer noted that “many of those in tough races in 2022” have sponsored the gas tax holiday bill.

Data last week showed U.S. consumer prices saw the biggest annual increase in inflation in 40 years.

The White House’s National Economic Council is reviewing the idea of suspending the gas tax, a source confirmed to Reuters, adding that talks are continuing in Congress. The debate mirrors some state efforts to also suspend state taxes at the gas pump this year, it added.

Biden has also asked U.S. regulators to probe gasoline prices and last year met with U.S. oil and gas producers over the issue.