- A Democratic lawmaker said a suspension of the gas tax would “blow a massive hole” in the transportation budget.
- Rep. Blumenauer, in a letter, called on President Biden to reject the push for a gas tax holiday.
- Several Democrats have embraced the idea as a way to provide some relief to motorists.
Something is loading.
Rep. Earl Blumenauer said President Joe Biden should reject a possible suspension of the federal gas tax, arguing that it “would have negligible impacts for consumers” and “blow a massive hole” in the transportation and infrastructure budget.
Blumenauer — an Oregon Democrat who has served in the House since 1996 — is going against the wishes of several swing-state Democrats, who want to provide any relief at the pump for consumers during a time when the price of gas is averaging a little under $5 a gallon.
However, the congressman in a Thursday letter to Biden referenced an analysis by the Transportation Investment Advocacy Center, which stated that only 18 percent of state gas tax increases or decreases were “passed through to motorists” in the two-week period after the changes were implemented.
“While there is undoubtedly a need to provide American consumers relief from spiking costs, there is no guarantee a gas tax suspension would reduce prices at the pump or stem the broader inflation affecting the global economy, and it may only increase oil companies’ bottom lines,” he said.
Blumenauer said that even a temporary reduction in the gas tax would hurt projects tied into the $1.2 trillion bipartisan infrastructure bill, which was signed into law last year and remains one of the administration’s most cherished political achievements.
The congressman then questioned whether Americans would truly see reduced costs under such a proposal.
“Suspending the federal gas tax would not lower prices for consumers, and would not have the desired political effect; it also would seriously damage important policy opportunities, and should be rejected by your administration,” he said.
And Blumenauer also noted that the proposal would deprive the Highway Trust Fund of critical revenue, citing a budget estimate from the Wharton School of Business at the University of Pennsylvania, which showed that the federal government would collect $20 billion less during a potential 10-month gas tax holiday.
“Even as suspending the gas tax would have negligible impacts for consumers, it would blow a massive hole in the federal transportation and infrastructure budget,” he said. “While the Highway Trust Fund has operated with troubling deficits for years, now is not the time give up on the user fees sustaining the fund.”
A gas tax holiday would require congressional approval, but Biden could call on lawmakers on Capitol Hill to get behind a bill if he decides to officially back the idea.
Several states — including Georgia, Maryland, and New York — have already enacted state gas tax holidays.
And Treasury Secretary Janet Yellen on Sunday told ABC News that a federal gas tax holiday was “certainly worth considering.”