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Biden calls on Congress, states to suspend gas taxes

Matt Stone/MediaNews Group/Boston Herald via Getty Images

(WASHINGTON) -- President Biden on Wednesday called on Congress to suspend the federal gas tax for three months and asked states to suspend their own gas taxes or provide commensurate relief to consumers.

The federal government charges an 18.4-cent tax per gallon of gasoline and a 24.4-cent tax per gallon of diesel. Suspending the tax for three months -- through the end of September, will cost about $10 billion, the White House said.

"I fully understand that the gas tax holiday alone is not going to fix the problem," Biden said in remarks delivered from the South Court Auditorium. "But it will provide families some immediate relief, just a little bit of breathing room, as we continue working to bring down prices for the long haul."

But the idea may not get the reception Biden is looking for from lawmakers on Capitol Hill.

House Speaker Nancy Pelosi, D-Calif., was noncommittal on the issue in a statement she released after Biden's announcement. "We will see where the consensus lies on a path forward for the President’s proposal in the House and the Senate," the statement read.

Sen. Joe Manchin, D-W.Va., told ABC News on Wednesday that he's not on a "yes" vote as of now.

"Now, to do that and put another hole into the budget is something that is very concerning to me, and people need to understand that 18 cents is not going to be straight across the board -- it never has been that you'll see in 18 cents exactly penny-for-penny come off of that price," Manchin said.

Biden specifically called on companies to make sure that "every penny" of those savings are passed through to consumers.

"This is no time for profiteering," he said.

Biden on Wednesday also called on the industry to use profits to refine more oil and gasoline and lower prices at the pump.

"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," Biden said. "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 to it now. Do it now, do it today. Your customers, the American people, they need relief now."

The administration has been putting public pressure on oil companies to help Americans at a time of financial need.

"Companies, of course, are beholden to their shareholders, but they really need to be beholden and conscious of customers, and their fellow neighbors, and their fellow citizens, just like this administration's doing," another senior administration official told reporters. "And we hope that that's the spirit that CEOs of these companies will take."

Energy Secretary Jennifer Granholm is scheduled to meet with oil company executives Thursday, during which they will press executives to ensure they'll pass on the savings if the gas tax holiday is enacted.

"We are encouraging these oil and gas companies to invest, to help their fellow citizens, to help their own workers," Granholm told reporters at the daily White House press briefing. "We need them to come to the table."

When asked about the apparent lack of support for the gas tax holiday from lawmakers, Granholm said there will be ongoing discussions.

"I would hope that both sides of the aisle are listening to their constituents about getting relief," she said. "I think the citizens will be the loudest voice in the room."

On Wednesday, Biden also called on state and local governments to provide "relief" to Americans by suspending their state gas taxes or provide other remedies, like delaying planned tax and fee increases, or even consumer rebates or relief payments.

State gas taxes average about 31 cents per gallon of gasoline, according to the U.S. Energy Information Administration.

Researchers at the University of Pennsylvania's Wharton School recently found that the suspension of gas taxes in Maryland, Georgia and Connecticut were, in fact, "mostly passed onto consumers at some point during the tax holiday in the form of lower gas prices," but that the lower prices "were often not sustained during the entire holiday."

In Maryland, 72% of the tax savings were passed on to consumers; in Georgia, 58-65% were, and in Connecticut, 71-87% were, according to their analysis.

When asked why Biden wants the federal tax suspended for three months specifically, the official said the president wanted to balance the need of "the unique moment that we're in" -- particularly during the summer driving season -- with the fact that the tax provides important revenue for the government to pay for highways and other transportation projects.

"The purpose of this suspension," the official said, "is really to address the unique moment that we're in, and with a particular focus on the summer driving season and the pain that families are feeling at the pump right now, while recognizing that on a longer-term basis, the gas tax is an important source of revenue for federal infrastructure."

The gas tax revenue goes to the federal government's Highway Trust Fund, which provides for much of the government's spending on highways and mass transit.

Biden said his proposal wouldn't affect the Highway Trust Fund, and an administration official previously told reporters that Congress can fill in the $10 billion gap with "other revenues."

"I promise you I'm doing everything possible to bring the price of energy down, gas prices down," the president said.

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