WASHINGTON (AP) – President Joe Biden Wednesday called on Congress to suspend federal gasoline and diesel taxes for three months, a move aimed at reducing financial pressure at the pump, which also shows high political toxicity of gas prices. this election year.
The Democratic president also called on states to suspend their gas charges or provide similar benefits, said administration officials, who had previously viewed his proposals on condition of anonymity because they had no right to speak to public.
The federal gas tax is 18.4 cents per gallon and the federal tax is 24.4 cents per gallon on diesel fuel. If gas savings were fully passed on to consumers, people would save about 3.6% on a pump when prices nationwide were on average $ 5 per gallon.
But many economists and lawmakers on both sides are skeptical of the idea of a gas tax exemption.
Barack Obama, during the presidential campaign in 2008, called the idea a “hoax” that allows politicians to “say they did something”. He also warned that oil companies could recover tax breaks by raising prices.
High gas prices pose a major threat to Biden’s elections and political ambitions. They led to a decline in economic confidence, which was bad for maintaining control of the Democratic Chamber and Senate in November.
Biden’s previous attempts to cut gas prices – including taking oil from the U.S. Strategic Reserve and a larger ethanol mix this summer – have done nothing to save on the pump, threatening the idea of a reduction. in the gas tax.
Biden acknowledged that gas prices are undermining public enthusiasm as he tries to reassure people that the U.S. can still promote a clean energy future. In an interview with the Associated Press last week, Biden described a country that already has some psychological scars from a corovirus pandemic that is now worried about how to buy gas, food and other basic necessities.
“If you notice gas prices before they start to rise,” Biden said, “things are more, they’re more optimistic.”
There is very little the president can do to set the prices imposed by global markets, by corporations for profit, by consumer demand, and by additional force from Russia to invade Ukraine and impose additional embargoes. The main problem is the lack of refineries producing oil and gas, a challenge that tax breaks cannot solve.
Mark Zandy, chief economist at Moody’s Analytics, estimates that most of the 8.6% inflation in the United States over the past 12 months has come from rising commodity prices due to delays in Russia’s invasion and the continuation of the corovirus.
“In the near future, it is very important to stop rising oil prices,” Zandi said last week, suggesting that Saudi Arabia, the UAE and the nuclear deal with Iran will help boost supply and lower prices.
Republican lawmakers are trying to blame Biden, saying he created a bad environment for domestic oil producers by lowering their production to pre-pandemic levels.
Republican Senate leader Mitch McConnell laughed at the idea of a gas tax exemption in a courtroom speech in February. “They spent the whole year on American energy available during the Holy War and now they want to use taxpayer money to hide the consequences,” he said.
Democratic Chamber Speaker Nancy Pelosi has previously expressed doubts about the amount of the federal gas tax suspension.
Administration officials said the $ 10 billion worth of gas tax breaks will be paid and the Highway Trust Fund will remain intact, even though gas taxes are a major source of revenue for the fund. Officials did not identify a new source of revenue.
The president also called on energy companies to adopt low -profit to increase oil production and fuel refining capacity.
This raises tension among oil producers: Biden described the companies as “more profitable than the Lord”. It triggered a range of events when Chevron CEO Michael Wirth sent a letter to the White House saying the administration was “mostly trying to criticize and sometimes insult our industry.”
Asked about the letter, Biden said of Wirth: “You’re very sensitive. I didn’t know they were so easily distracted by emotion.
Energy companies plan to meet with Energy Secretary Jennifer Granholm on Thursday to discuss ways to increase supply.
Source: Huffpost
