In 2008, Barack Obama called the idea of gas-tax holiday proposed by both John McCain and Hillary Clinton an election-year “gimmick” rather than a solution to high gas prices. “The easiest thing in the world for a politician to do,” Obama said in April 2008, “is tell you exactly what you want to hear.”
Fourteen years later, the man Obama elevated into the vice-presidency now wants to tell us what he thinks we want to hear:
President Joe Biden will ask Congress on Wednesday to suspend the federal gas tax for the next three months in one of his administration’s most aggressive and controversial efforts to give Americans immediate relief as gas prices soar above $5 a gallon in many states.
The president also plans to call on states and local governments to temporarily suspend their gas taxes, according to senior administration officials who discussed the push on the condition of anonymity ahead of a 2 p.m. ET speech when Biden will formally make his case.
A three-month federal gas tax holiday would suspend a tax of 18.4 cents per gallon of gas and 24.4 cents for diesel that drivers pay when they fill their tanks. The administration is billing the gas tax holiday as a way to provide some “breathing room” as it works to bring costs down over the long term. The pause, which the White House envisions lasting through September, would require congressional approval.
Joe Biden’s probably counting on Republicans to resist this foolish gimmick, and he’s most likely correct. Perhaps they shouldn’t, however, and instead let this silly idea finally have its day. The momentary 18.4¢ per gallon reduction in gas prices will get swallowed up by still-rising prices, which rose by 40¢ in the first two weeks of this month alone. The momentary spike in demand will likely force higher increases in price than might have happened without the “holiday,” in fact. Then, sometime in September just when the first voters begin to cast ballots in a few jurisdictions for the midterms, Biden will hit them with an 18.4¢ tax hike.
Does anyone do math or look at a calendar in this White House? Really? Even among election-year panders, this idea is … well, as competent as you’d expect from Biden and his team.
Even CNN finds itself unimpressed. Business analyst Matt Egan also remembers what Obama said about this idea in 2008, and breaks down all the reasons why it’s not just silly but entirely counterproductive:
First, a gas tax holiday would do nothing to fix the supply shock driving up prices, not just for gasoline but diesel and jet fuel, too. Secondly, it would push demand in the wrong direction. At a minimum, artificially lowering prices would support buying gasoline, underlining the adage that the best cure for high prices is high prices.
“The risk is that at a time when the supply-and-demand balance that sets prices is already extremely out of balance, it would enable more Americans to hit the road,” said Patrick DeHaan, director of petroleum analysis at GasBuddy.
Suspending the gas tax also would effectively encourage the use of gasoline — running counter to the Biden administration’s ambitious climate goals that call for moving away from fossil fuels.
And let’s not forget that the federal gas tax actually serves a specific purpose. As Egan points out, it finances the Highway Trust Fund, which goes to a number of infrastructure maintenance tasks. One of Biden’s few accomplishments in his first 17 months in office was passing a bipartisan infrastructure bill that has to work in tandem with the Highway Trust Fund. Now Biden is proposing to starve the one solid win he got other than the inflation-starting American Rescue Plan to try to temporarily blunt the effects of Biden’s insane energy policies.
BASH: But he’s not doing everything that he can do. One option is to pause the national gas tax. That is something that the woman who sits in the governor’s mansion that you were just — that you were in previously, Gretchen Whitmer, is calling for. Why hasn’t that happened yet?
GRANHOLM: Yes. I mean, it’s one of the tools. First and foremost, we want to increase supply. We also want to take a look at consumer relief directly. And that is…
BASH: Right, but this is 18 cents per gallon.
GRANHOLM: It’s 18 cents.
BASH: That’s a lot when you add up it. So, why not do it now?
GRANHOLM: It is. And it’s certainly one of the things the president is evaluating. I know this is what’s been happening in many states as well. Honestly, the whole array of tools are still being pressed. He’s used the biggest tool that he has, but he’s obviously very concerned about this continued upward pressure on prices.
BASH: What’s he waiting for on the gas tax?
GRANHOLM: Well, I mean, part of the challenge with the gas tax, of course, is that it funds the roads. And we just did a big infrastructure bill to help fund the roads. So, if we do — if we remove the gas tax, that takes away the funding that was just passed by Congress to be able to do that. So that’s one of the challenges, but I’m not saying that that’s off the table. That is — as prices continue to rise, it’s certainly something the administration is considering, just like I know governors across the country are considering that.
Let’s recap. Biden refuses to take action to add supply by rescinding EO 13990 and removing the disincentives and regulatory hurdles to expanded production and refining. Instead, Biden instead plans to goose demand by temporarily lowering the disincentives on use, in the highest-demand period of the year. In doing so, he will starve his own infrastructure program of funds, and then allow the taxes to snap back right on cue for the midterms … none of which will solve the real problems of supply and investment in production which is creating this problem on Biden’s watch.
Update: Obama was even harsher on this in 2008 than I recalled. All of this applies directly to Biden today.
Back when Obama dismissed the idea of a gas tax holiday https://t.co/6RfqDoWXCY
— Charlie Spiering (@charliespiering) June 22, 2022