WASHINGTON (AP) — President Joe Biden on Wednesday called on Congress to suspend federal gasoline and diesel taxes for three months — an election year. move intended to ease financial pressures that was met with suspicion by many lawmakers.

The Democratic president also called on states to suspend their own gasoline taxes or provide similar relief, and he publicly criticized the energy industry for prioritizing profits over production. Steps should be taken by lawmakers in Washington and state houses across the country to provide real relief to consumers.

“It won’t reduce all the pain, but it will be a huge help,” Biden said, using the bully pulpit when his administration feels it no longer has direct levers to deal with the surge in violence. gasoline prices. “I am doing my part. I want Congress, states and industry to do their part as well.

In question, the federal tax of 18.4 cents per gallon on gasoline and the federal tax of 24.4 cents per gallon on diesel fuel. If gas savings were fully passed on to consumers, people would save about 3.6% at the pump when prices average around $5 a gallon. at national scale.

Biden’s push faces challenges in Congress, which must act to suspend the tax, and where many lawmakers, including some from his own party, have expressed reservations. Even many economists are considering the idea of ​​a gas tax exemption with scepticism.

Democratic House Speaker Nancy Pelosi offered a noncommittal response to Biden’s proposal, saying she would look to see if it received support in Congress.

“We’ll see where the consensus is on the way forward for the president’s proposal in the House and Senate,” Pelosi said.

Unlikely to pass a 50-50 Senate gas tax exemption, Majority Leader Chuck Schumer of New York said Wednesday that Democrats would instead focus on their bill to crack down on corporations. oil companies “manipulating the market” for higher prices and profits. “We’re going to focus on that issue,” Schumer said.

In his speech, Biden linked rising energy prices to Russia’s invasion of Ukraine and said that “defending freedom, defending democracy was not going to come without a cost to the American people and the rest of the free world”. The president noted that lawmakers supported sanctions against Russia and helped Ukraine despite inflation risks stemming from energy and food shortages.

Democrats, Republicans and independents in Congress have chosen to support Ukraine, “fully knowing the cost”, he said.

“So to all those Republicans in Congress who are criticizing me today for high gas prices in America: are you saying you were wrong to support Ukraine?” Biden said. “Are you saying we would rather have lower gas prices in America than (Russian President Vladimir) Putin’s iron fist in Europe? I do not believe that. ”

The president said “states are now in a strong position to be able to afford to take some of these measures,” thanks to federal support for the COVID-19 Relief Bill 2021. But there is no guarantee that states will draw on their budgets to suspend their gas taxes or to provide consumer rebates, as Biden demands.

Barack Obama, during the 2008 presidential campaign, called the idea of ​​a gas tax exemption a “trick” that allowed politicians to “say they did something”. He also warned that oil companies could offset the tax relief by raising their prices.

The administration says federal and state gasoline tax suspensions and energy companies pouring their profits into production and refining capacity could cut gasoline prices by $1 a gallon.

High gas prices pose a fundamental threat to Biden’s electoral and political ambitions. They created confidence in the economy from collapsing to low levels that bode ill for defending Democratic control of the House and Senate in November.

Biden’s past efforts to cut gas prices – including the release of oil from the US Strategic Reserve and a larger mixture of ethanol this summer — haven’t realized any savings at the pump, a risk that carries over to the idea of ​​a gas tax exemption.

There is little the president can do to fix the prices set by global markets, for-profit corporations, consumer demand and the aftershocks of Russia’s invasion of Ukraine. and subsequent embargoes. The underlying problem is a shortage of oil and refineries that produce gas, a challenge that a tax holiday may not necessarily solve.

Mark Zandi, chief economist at Moody’s Analytics, estimated that the majority of inflation of 8.6% observed over the past 12 months in the United States stems from the rise in commodity prices due to the invasion of Russia and the continued disruptions due to the coronavirus.

“In the immediate term, stemming the rise in oil prices is essential,” Zandi said last week, suggesting that Saudi Arabia, the United Arab Emirates and a nuclear deal with Iran could help boost supply and lower prices. Republican lawmakers have tried to shift the blame further to Biden, saying he created a hostile environment for domestic oil producers, causing their output to remain below pre-pandemic levels.

Senate Republican Leader Mitch McConnell derided the gas tax exemption as an “ineffective stunt” in a speech on Wednesday. “The big new idea from this ineffective administration is a stupid proposition that senior officials in their own party have already rejected well in advance,” he said.

Rep. Peter DeFazio, Democratic chairman of the House Transportation and Infrastructure Committee, said he would not support suspending the gas tax. “I will work against that. I have the biggest committee in Congress, so we’ll see.

DeFazio said a better solution would be to tax oil companies on “windfall profits.”

Administration officials said the $10 billion cost of the gas tax exemption would be paid and the Highway Trust Fund would remain in full, even though gas taxes are a substantial source. income for the fund. Officials did not specify new sources of income.

The president also called on energy companies to accept lower profit margins increase oil production and gasoline refining capacity.

This has increased tensions with oil producers: Biden has judged that the companies are making “more money than God”. This set off a series of events in which the head of ChevronMichael Wirth, sent a letter to the White House saying the administration “has widely sought to criticize, and sometimes vilify, our industry.”

Asked about the letter, Biden said of Wirth: “He is slightly sensitive. I didn’t know they would be hurt so quickly.

Energy companies are due to meet Energy Secretary Jennifer Granholm on Thursday to discuss ways to increase supply.


Associated Press writers Lisa Mascaro, Matthew Daly and Kevin Freking contributed to this report.