President Biden on Wednesday urged Congress to suspend federal gas taxes for three months amid record-high prices — while demanding that gas stations slash prices “now.”
Biden said federal taxes — 18.4 cents a gallon on gas and 24.4 cents on diesel — should be waived until September, but the idea may not pass the Senate, where at least two Democrats say they aren’t on board.
“By suspending the 18-cent federal gas tax for the next 90 days, we can bring down the price of gas and give families just a little bit of relief,” Biden said in an afternoon speech near the White House.
The notion of a gas tax holiday is something his former boss, President Barack Obama, derided when he first ran for the White House, calling it a “gimmick.”
His Democratic primary foe, Hillary Clinton, and Republican presidential nominee John McCain were calling for the gas tax break in April 2008 — a move Obama, then a senator, labeled as a political ploy “to get them through an election,” CBS News reported at the time.
“The easiest thing in the world for a politician to do is tell you exactly what you want to hear,” Obama, who would go on to tap Biden as his running mate, said at the time.
With the notion of a gas tax holiday facing long odds of approval by Congress, Biden also turned his focus on individual gas station owners Wednesday, urging them to immediately “bring down the price you are charging at the pump.”
Biden previously alleged US oil companies are not drilling or refining enough oil to offset the hike in prices caused by Russia’s Feb. 24 invasion of Ukraine. Most US gas stations aren’t owned by oil companies.
“In the last two weeks, the price of oil has fallen by more than $10 a barrel. Normally, this would reduce the cost at the pump about 25 cents a gallon. Yet so far, gas stations have only reduced prices by a few cents a gallon. Some haven’t reduced prices at all,” Biden said.
“I’ve heard plenty of explanations from companies and economists about why it normally takes time for these price reductions to reach the consumer. I might note that when the price of a barrel of oil goes up, it doesn’t take much time for the price of the pump to go up,” he went on.
“So let’s be honest — my message is simple to the companies running gas stations and setting those prices at the pump: This is a time of war, global peril, Ukraine. These are not normal times. Bring down the price you are charging at the pump to reflect the cost you are paying for the product. Do it now. Do it today. Your customers, the American people — they need relief now.”
According to data from the National Association of Convenience Stores, there are about 145,000 US fueling stations. Companies that refine oil own less than 5% of the stores and about 60% are owned by a single person or family that operates just one location.
Energy Secretary Jennifer Granholm said Wednesday at a White House briefing that Biden hopes to win bipartisan support for the gas tax waiver, despite an initially lukewarm reception.
Critics in both parties worry the move would shortchange a federal highway construction fund. Granholm said the three-month tax waiver would result in a $10 billion loss to the fund, but that Biden wants legislators to “backfill” the amount.
NBC’s Kristen Welker, however, pressed Granholm on whether the proposal was merely a “stunt” due to lack of support in Congress. Granholm countered that Biden was “gonna be having conversations with Democrats and Republicans” to press the plan.
Biden previously accused oil companies of profiteering and charged that they are not refining or drilling enough to address global price hikes caused by Russia’s invasion of Ukraine, drawing pushback from the companies and ridicule from critics who point out Biden discouraged fossil fuel production last year.
On Tuesday, Chevron CEO Michael Wirth, who runs the country’s second-largest oil company, pushed back on Biden in an open letter.
“In 2021, Chevron produced the highest volume of oil and gas in our 143-year history. In the first quarter of 2022, our U.S. production was 1.2 million barrels per day, up 109,000 barrels per day from the same quarter a year earlier,” Wirth wrote.
“In the Permian Basin [centered in West Texas] alone, we expect production to approach 750,000 barrels per day by the end of the year, an increase of more than 15 percent from 2021,” Wirth added.
“And Chevron’s U.S. refinery input grew to 915,000 barrels per day on average in the first quarter of this year from 881,000 in the same quarter last year.”
Gas prices increased gradually during 2021 — from about $2.30 to $3.27 per gallon —before surging when Russia invaded Ukraine on Feb. 24.
As global prices increased, Chevron reported a profit of $6.5 billion in the first quarter of 2022 — quadruple its profits of $1.7 billion from the first quarter of 2021.
Granholm will meet Thursday with oil company leaders, but Biden said Monday he would not participate.
Biden previously ordered the release of a million barrels per day from the Strategic Petroleum Reserve and allowed a higher proportion of ethanol in gas over the summer, but neither step lowered prices.
Biden on Wednesday also called on states to suspend their own taxes or provide similar relief. New York is one of several states to have already done so.
But Sens. Tom Carper (D-Del.) and Joe Manchin (D-WVa.) said they aren’t sold on adopting the idea federally — meaning Biden would need at least 12 Senate Republicans to endorse the plan.
The desperate measures come as the national average continues to hover around $5 a gallon for gas. Before this year, the previous highest recorded by AAA was $4.114 per gallon in July 2008.
The price hike comes during the threat of recession amid soaring inflation and other alarming signs of a failing economy, crushing Biden’s approval ratings and casting a dark cloud over Democrats’ chances of retaining congressional power in November’s elections.
Biden himself admitted in an interview last week that “until gas prices started going up … things were much more, they were much more optimistic.”
If the federal gas-tax holiday savings were fully passed along to consumers, people would save roughly 3.6% at the pump when prices are averaging about $5 a gallon nationwide.
“A federal gas tax suspension alone won’t fix the problem we face, but it will provide families a little breathing room as we continue working to bring down prices for the long haul,” one administration official said.
However, the suspension would require congressional approval, likely making Biden’s support largely symbolic.
House Speaker Nancy Pelosi (D-Calif.) has warned that it would have limited effect on prices — and that most of the savings would end up being pocketed by oil companies and retailers.
In a Wednesday statement, Pelosi said, “We will see where the consensus lies on a path forward for the President’s proposal in the House and the Senate.”
Senate Minority Leader Mitch McConnell (R-Mo.) mocked the idea of a gas tax holiday in a floor speech in February before the current record-high prices.
“They’ve spent an entire year waging a holy war on affordable American energy, and now they want to use a pile of taxpayers’ money to hide the consequences,” he said.
Biden has also called on energy companies to accept lower profit margins, accusing them of making “more money than God.”
The president has also called on energy companies to accept lower profit margins, accusing them of making “more money than God.”
Administration officials directly blame the price hike on the Ukraine war, noting that prices had gone up almost $2 a gallon since Russian President Vladimir Putin began building up forces earlier this year.
The president “believes that states, oil companies and retailers have a responsibility in this unique moment – to do their part to ameliorate Putin’s price hike,” an official told Fox News.