free webpage hit counter

Biden calls for a 3-month suspension of the gas tax, though officials acknowledged it ‘will not solve the problem alone’.

Biden is calling on states to remove their own taxes on gas and diesel. And they tell oil refining companies to increase their capacity before their planned meeting with administration officials this week.

Together, senior administration officials claim, Biden’s calling measures could reduce the cost of each gallon of gas by $ 1. Yet that statistic relies on several steps that are completely out of the president’s control – not the least to convince Congress to approve their plan.

The actions sum up Biden’s recent effort to show that he is taking the initiative in lowering fuel prices as Americans become increasingly frustrated by the economic burden. White House officials have been considering a gas tax holiday for months, but have been partially blocked by concerns about how it could be accepted in Congress.

Republicans are widely opposed to the removal of the Gax tax. Some Democrats, including House Speaker Nancy Pelosi, have been cool with the idea. And in the past, senior Democrats – including President Barack Obama on the campaign trail in 2008 – have called the gas tax holiday a “gimmick.”

Still facing growing anger and the start of the summer driving season, Biden decided it was worth taking even the smallest steps on the symbolic border.

“Under the conditions we are in today, it’s not a gimmick. When we get into the summer driving season, it’s a little breathing room for the American people,” said Amos Hochstein, senior adviser on energy security at the State Department. In an interview with CNN’s “New Day” Wednesday morning.

The current federal tax on gas is about 18 cents per gallon, while the federal tax on diesel is 24 cents per gallon. Even if the savings are passed directly to consumers by lifting those taxes – which are not guaranteed – the savings for a filling may be just a few dollars.

Biden is expected to support federal gas tax holidays as oil industry criticism mounts amid rising prices
Some Democrats have previously expressed skepticism about the gas tax holiday, noting that the tax provides a major source of funding for road construction. Officials said Biden would call for other revenue sources to be used to cover the deficit, and on Tuesday he worked to alleviate some of those concerns.

“Look, it will have some impact, but it won’t affect major road construction and major repairs,” he told reporters.

Economists are skeptical

Some economists say that the savings that consumers pass on are minimal as retailers simply increase the base price of gas to cover the difference.

“Whatever you thought about the eligibility for a gas tax holiday in February, that’s a bad idea now,” Jason Furman, a senior Obama administration official, wrote on Twitter. “Refineries are now more restricted so supply is completely unstable. The 18.4 percent reduction is pocketed by the industry – maybe a few cents shifted to customers.”

Senior officials of the administration have acknowledged the criticism, but Biden said companies are under pressure to pass on the savings.

“The president is calling and urging the industry, companies and retailers to pass it on to the customers at the pump,” Hochstein said, without explaining what the president can do to ensure customers see the full savings.

“We are calling on the industry to review it and make it accurate, to pass it on,” he said.

Another official, speaking before the announcement, admitted that suspending the tax would not “solve the whole problem.”

“This is something that can be done to take a real step toward alleviating some of the pain at the pump, and we see it as part of a suite of policies designed to provide relief, including policies that focus on the supply side,” the official said.

Even so, quick action seems difficult. Processing capacity cut during the Kovid-19 epidemic takes months to go back online, and now refineries are running at about 90% of their capacity.

“We are definitely approaching this in constructive, dynamic, practical ways. I think the American people should do so again,” said a second senior administration official at a meeting with seven top executives and Energy Secretary Jennifer Granholm on Thursday.

Biden seeks out the victims

The president has increased the heat on oil and gas companies in recent weeks, as gas prices have soared, and at one point last week, the national average rose above $ 5 per gallon.

Biden has made the Russian war in Ukraine his top victim of rising gas prices but has called on oil and gas companies, accusing him of not doing enough to cut costs and profiting from the war. He repeated some of those arguments on Tuesday, saying the country “needs more refining capacity.”

“The idea that they have no oil to drill and bring is not true,” he said.

In response to the president’s remarks, the Biden administration has often said that the prices are too high because they perceive the oil industry to be a limitation on domestic oil and gas production.

Chevron CEO Mike Worth said in a letter Tuesday that Biden should stop criticizing the oil and gas industry and calling for a “change in approach” from the White House.

“Your administration has tried to criticize and sometimes defame our industry,” Worth wrote in an open letter to Biden. “These measures are not beneficial to the challenges we face and are not worthy of the American people.”

Biden responded later in the day: “They’re a little sensitive,” adding: “I didn’t know they were hurting their feelings anytime soon.”

Leave a Reply

Your email address will not be published.

Previous post Artist Uvalde hopes to curate his city with 21 murals
Next post 10 Tips on How to Save Money on Golf