A sign of how desperate President Biden has become to turn around the bad news associated with rising gas prices, he is proposing a three-month federal gas tax holiday (i.e., suspending collection). An official announcement from the White House contends: “The President is also calling on Congress to make sure that a gas tax holiday has no negative effect on the Highway Trust Fund.” To avoid jeopardizing infrastructure spending, one of the few bipartisan accomplishments to date, “the President believes that we can afford to suspend the gas tax to help consumers while using other revenues to make the Highway Trust Fund whole for the roughly $10 billion cost.”
Congressional bills consistent with this approach have been introduced in the Senate and the House of Representatives – but, it remains to be seen even if the proposal does garner the necessary support, whether it will amount to any more than temporary relief from rising gas prices. [Some contend, in the long run it may actually increase inflation by removing a portion of the cost, for the next three months, that may have otherwise tamped down demand]. Notwithstanding, the proposal does not suggest reversing or temporarily suspending any policies and/or regulations that have blunted American production and refining to help address the supply side as a long term solution.