Top Democrats are weighing whether to suspend the federal gas tax temporarily, seeking to reduce the strain on consumers and quiet mounting frustrations that some fear could cost Democrats their narrow congressional majorities this November.
The Gas Price Relief Act was introduced last week by Sens. Mark Kelly of Arizona and Maggie Hassan of New Hampshire, two vulnerable Democrats seeking reelection in November, and would suspend through January 2023 the federal gas tax of roughly 18 cents per gallon.
To offset the lost tax revenue in the interim, the bill would require the Treasury Department to transfer money from a general fund into the Highway Trust Fund, which currently receives the taxpayer money, in order to keep it solvent. A recent estimate from the Committee for a Responsible Federal Budget found that the measure, if passed, would reduce gas tax revenues by $20 billion. The tax holiday would advance the insolvency date of the Highway Trust Fund from 2027 to 2026, CRFB researchers found.
“While a gas tax holiday might provide some temporary relief, much of the benefit may flow through to oil producers or lead to higher prices in other sectors of the economy,” CRFB President Maya MacGuineas said in a statement Tuesday. “By boosting demand in an already over-stimulated economy, the holiday would likely boost inflation in 2023 once it ends. The holiday will also undercut the Administration’s efforts to address climate change.”
Still, in the days since its announcement, the push for a federal gas tax holiday has earned support from other Democrats facing tough midterm challenges this fall, including Sens. Debbie Stabenow of Michigan, Raphael Warnock of Georgia, Catherine Cortez Masto of Nevada, and Jacky Rosen of Nevada. It has also won early approval from some House Democrats.
The measure is also reportedly being weighed by the White House.
“I grew up in a family where the price at the pump was felt in the kitchen,” said President Joe Biden on Tuesday at a conference hosted by the National Association of Counties. “I’m going to work like the devil to bring the price of gasoline down.”
Asked about the temporary gas tax suspension during a White House briefing, press secretary Jen Psaki also declined to rule out such a move, only telling reporters that “all options are on the table.”
Still, the effort has sparked early opposition from some Senate Republicans and at least one Democrat in the chamber: Sen. Joe Manchin. On Tuesday, the West Virginia Democrat told reporters he was “uncomfortable” with the notion of a federal gas tax holiday, which Manchin said could hurt funding to repair federal highways.
“People want their bridges and their roads, and we have an infrastructure bill we just passed this summer, and they want to take that all away,” Manchin told reporters. “It just doesn’t make sense,” he added.
That sentiment was echoed by Republican Sen. Lisa Murkowski of Alaska, who said of the effort, “It may give you momentary relief. It’s not anything that works to address the bigger problem.”
