Context

Biden's "Silly Proposal" To Suspend Gas Tax For 3 Months Faces Ridicule

Swarajya Staff

Jun 23, 2022, 04:28 PM | Updated 04:28 PM IST


American President Joe Biden
American President Joe Biden

US President Joe Biden has suggested the temporary suspension of the federal gas tax to combat fuel inflation. But why is it facing criticism?

Context: Fuel prices in the US, ie, petrol, diesel, and gas have skyrocketed since Biden took office.

  • This coupled with food inflation and shortages is massively troubling the American people.

  • Biden suggested to the US Congress (the American version of Parliament) to suspend the federal gas tax.

The current tax collection system: The taxes collected on gas fund highways and public transportation through the Highway Trust Fund.

  • 18-cent tax per gallon on gasoline

  • 24-cent tax per gallon of diesel

What Biden thinks: Biden claimed the tax could be suspended without harming the highway trust fund.

  • He also called on the states to suspend their share of the gas tax.

  • He continued to blame Russian President Vladimir Putin and the Russian invasion of Ukraine for fuel inflation.

  • Biden also called on the energy companies to pass on the benefits to the consumers.

What Biden has tried so far: He had previously considered a tax holiday in February but did not pursue it.

  • In April, he announced the release of 1 million barrels of oil per day from the nation's strategic petroleum reserve for the next six months.

  • Biden also called on the American oil companies to increase their refining capacity and work with his administration on the inflation issue.

How the US Congress reacted: The suggestion to suspend gas tax did not go down well with either of the parties and the idea faced ridicule and criticism.

  • Biden's own Democrat party members expressed cynicism and doubts over the effectiveness of this idea.

  • Democratic Representative Peter DeFazio of Oregon, the chairman of the House Transportation and Infrastructure Committee, said that it's a "shortsighted proposal that relies on the cooperation of oil companies to pass on minuscule savings to consumers."

  • House Speaker Nancy Pelosi - also a Democrat - has been previously skeptical of the proposal, saying there was "no guarantee" that companies would pass on the savings to consumers.

  • Meanwhile, the Republican party called it an ill-thought and silly proposal which neither financially viable nor sound

  • Senate minority leader Mitch McConnell termed the proposal an "ineffective stunt" and a "silly proposal."

What to expect going forward: President Biden is also seeking cooperation from fossil fuel-based companies. In his latest communication, Biden urged Chevron CEO Michael Wirth to increase refining capacity and still not give up on transitioning to renewable energy."


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