President Biden Calls for Gas Tax ‘Holiday’

What happened: President Biden, after months of deliberation over how to tame rising motor fuel prices, June 22 called on Congress to send him a bill that suspends the 18.4 cents per gallon federal gasoline tax for 90 days. Members of the Senate and House proposed fuels tax suspensions earlier in the year, but Biden did not take a position until today.

‘By suspending the 18-cent 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 during a speech announcing the policy shift. He added the Highway Trust Fund should be compensated for the $10 billion in foregone revenue that would result from his proposed gas tax suspension.

The president also called on oil and gas industry companies to pass along the savings to consumers and pushed for states to pause their gasoline taxes as well.

Why it matters: The federal gasoline tax is the single largest revenue stream that supports the federal highway and public transportation investment commitments from the 2021 infrastructure bill. Pausing collections not only jeopardizes the bipartisan compromises that enabled that landmark measure, but such a maneuver would establish a precedent that these user fee revenues could be halted whenever elected officials feel the price of gas is too high. There would be no guarantee the fuel tax would return and no guarantee any future suspensions would include a reimbursement for lost highway and transit program revenue.

What’s next: The congressional response to President Biden’s call is unclear at this time. House Speaker Nancy Pelosi (D-Calif.) today was noncommittal on whether the plan would be taken up in the House, and Senate Minority Leader Mitch McConnell (R-Ky.) in a Senate floor statement called the proposal an ‘ineffective stunt.’ McConnell also cited ARTBA’s Transportation Investment Advocacy Council study of state motor fuel tax increases and decreases from March, which demonstrates only 18 percent of changes to state gas taxes flow to the consumer at the pump.

ARTBA today resumed its digital and social media advertising campaign that features former President Barack Obama referring to a similar gas tax suspension plan in 2008 as a ‘gimmick.’ We are also partnering with our state affiliates to host a series of state congressional delegation briefings about the status of the new infrastructure bill and the flaws of any gas tax ‘holiday.’

Take Action:

Contact your members of Congress and urge them to oppose efforts to suspend the federal gas tax.

Consider joining us at the National Workshop for State and Local Transportation Advocates July 12-13 in DC for our session on “Gas Tax Suspensions: Pedal to the Metal or Running on Empty?”