Biden's gas tax holiday idea is sputtering at the starting line
President Joe Biden’s call for a three-month suspension of the 18-cent federal gas tax in response to soaring gas prices has, thankfully, landed with a bipartisan thud in Congress.
The idea, an old fallback for politicians when pump prices rise, is virtually always a bad one, providing meager relief to motorists while blowing major holes in highway budgets. The administration should let this notion sputter out.
Today’s record gas prices are primarily the result of the global oil industry cutting production during the pandemic and then getting caught in short supply with the surge in demand as people have started traveling again. Russia’s war in Ukraine has exacerbated those factors.
What experts say hasn’t contributed are the Biden administration’s environmentally minded energy policies, because they have either been tied up in court or haven’t been as environmentally minded as advertised.
But ultimately, there are certain issues — the stock market, inflation and, yes, gas prices — on which any sitting president gets outsize credit or blame despite having little actual control. In that sense, Biden is the victim of bad economic timing. It doesn’t take clairvoyance to predict that, if a Republican were in the White House right now, Democrats would be just as merciless about assigning blame.
None of which mitigates the stench of desperation that surrounds Biden’s call for a gas tax holiday, an idea that may ultimately prove as bad politically as it is economically.
Do the math: A typical gas tank holds around 15 gallons. An 18-cent-per-gallon savings translates into less than $3 per tank. That’s not going to salvage anyone’s summer vacation — but it would cost the already-underfunded Highway Trust Fund some $10 billion, by the administration’s own estimate.
Some economists warn that the move could also worsen inflation since it would effectively pump billions of federal dollars into the economy.
Turning to an idea that former President Barack Obama once correctly labeled a “gimmick” isn’t the way to regain the public’s trust.
