In a phone interview with a reporter from CBS News on Monday morning, Donald Trump indicated he was willing to suspend the 18.3-cent federal gas tax (24.3 cents for diesel). Trump said the suspension would last “Until it’s appropriate.”
“I think it’s a great idea,” the president said. “Yup, we’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in.”
Trump said he knows the amount of the cut in prices is tiny. “It’s a small percentage,” he said, “but it’s, you know, it’s still money.”
Chris Wright, Trump's energy secretary, proposed the tax holiday on NBC’s “Meet the Press.” Wright said that “all measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of.”
As of Monday, the average national gas price was $4.52 a gallon, according to AAA, 50% higher than the average price of just under $3 a gallon before Trump began the war with Iran.
Trump claims that the price of gas will "drop like a rock" once Iran agrees to his terms. That's just not going to happen. A decrease in the price of a gallon of gas would require the oil supply to return to prewar levels. That may take a month or two, as mines have to be cleared, ship traffic has to return to normal, and confidence that Iran won't regress builds.
The president needs Congress to act. There's no guarantee it will.
GOP lawmakers, including Sen. Josh Hawley (R-Mo.), quickly promised legislation, but Senate Majority Leader John Thune was noncommittal.
"I've not in the past obviously been a fan of that idea. But you know, I've got some colleagues out there who think it's a good idea, and so we'll hear them out," he told reporters.
- Thune noted the revenue loss could hurt the Highway Trust Fund, and said "the best thing [that] can happen for gas prices is for the [Strait of Hormuz] to get opened up again."
💪 The White House political operation. It's hard to know whether it's something Trump's team will truly push, or instead one of his frequent musings, or something in between.
🗳️ It's a 2028 thing. Several potential White House hopefuls have now pushed to temporarily nix the tax.
- They would be Sen. Mark Kelly (D-Ariz.), Hawley, and Kentucky Gov. Andy Beshear.
🤷 The politics and plans remain in flux. Senate Minority Leader Chuck Schumer (D-N.Y.) isn't exactly shooting down the idea, but in a floor speech Monday, he took the position that it's not enough.
"The research firm ClearView Energy Partners said a hypothetical gas tax waiver from May 15 to Nov. 30 would cost nearly $14 billion. Add in other fuels, and the price climbs a lot more," according to Axios.
That's a big hit on money for the Highway Trust Fund, which takes in $45-$47 billion a year. The gasoline tax generates roughly $25 billion (at 18.4 cents per gallon). The diesel tax generates roughly $10.8 billion (at 24.4 cents per gallon).
The remaining 17% comes from taxes on heavy vehicle use, truck tires, and retail sales of trucks and trailers.
Meanwhile, Democrats have not been idle on the gas tax issue.
A bill sponsored by Democratic Sens. Richard Blumenthal of Connecticut and Mark Kelly of Arizona would suspend the federal tax through Oct. 1. A similar measure was sponsored in the House by Democratic Rep. Chris Pappas of New Hampshire.
“Trump’s war of choice with Iran is driving up gas prices across the country — and Americans shouldn’t have to bear the additional economic burden of Trump’s reckless decision making,” Blumenthal said in introducing the bill.
Kelly told reporters Monday he still prefers his legislation but would take “whatever we can get at this point.”
“People need relief,” he said.
Several states, including Indiana and Georgia, have recently suspended their taxes to alleviate high prices amid the war. Kentucky and Utah have reduced their state tax. Other states are weighing similar suspensions or tax reductions.
It doesn't look like there's much enthusiasm for the plan. Democrats don't want to hand Trump a cheap victory, and Republicans don't see much of an upside with a reduction of 17 cents per gallon. Both sides are going to have to grit their teeth and endure the spikes in gas prices at the pump and the resulting inflation, which spiked to 3.8% in April.
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Editor's Note: The Democrat Party has never been less popular as voters reject its globalist agenda.
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