Democratic lawmakers are pushing back against President Joe Biden’s call for a gas tax exemption, arguing that oil companies would pocket the savings rather than pass them on to consumers.
Sen. Tom Carper (D-Del.), Chairman of the Senate Environment and Public Works Committee, called the proposal a “short-sighted and ineffective means of providing relief”.
Sen. Mark Warner (D-Va.) also expressed skepticism.
“I’d like to see some of the data and some of the states that have tried this, if it actually led to a complete drop in gas prices,” he said in an interview with HuffPost.
Biden is urging Congress to pass a three-month suspension of the 18.4 cents per gallon tax on gasoline and the 24.4 cents per gallon tax on diesel. The proposal should be enacted in a way that does not affect funding for highway projects that rely on federal gas tax revenue, he said.
Biden is also calling on more governors to suspend their national gasoline taxes. Several Republican governors have already decided to do so, notably in Maryland, Virginia and Georgia.
The average US gas price has hovered around $5 a gallon this week.
The pain at the pump has rattled Democrats about their fate in the upcoming midterm elections. Vulnerable Democratic lawmakers, in particular, have been pushing for a federal gas tax waiver for months.
“While I am encouraged that the President now supports a gas tax exemption, I continue to believe that we should seek to suspend the gas tax for at least the rest of the year, not just 90 days,” Sen. Maggie Hassan (DN.H.) said in a statement Wednesday.
But Senate Democrats aren’t the only ones skeptical of the idea. House Speaker Nancy Pelosi (D-California) repeatedly rejected it, calling the move “very showbiz.”
“The downside is that the oil companies don’t necessarily pass it on to the consumer…you can’t write a law that requires them to pass it on,” Pelosi said earlier this year.
Economists have also argued that a gas tax exemption could worsen inflation. Jason Furman, former economic adviser to President Barack Obama, said consumers are less able to take advantage of a gas tax holiday today than they were six months ago due to problems supply.