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Biden Calls For A Gas Tax Holiday But Obama Previously Called The Concept A ‘Gimmick’ For Politicians To Win The Next Election

Biden Calls For A Gas Tax Holiday But Obama Previously Called The Concept A ‘Gimmick’ For Politicians To Win The Next Election

gas tax holiday

Photo: A customer pumps diesel fuel at a Madison, Miss., Sam's Club, May 24, 2022. (AP Photo/Rogelio V. Solis)

President Joe Biden asked Congress on Wednesday to suspend federal gas and diesel taxes for three months through the summer travel season to give Americans some relief at the pump, but some Democrats including his former boss have expressed doubts that such a move can provide many benefits.

The taxes in question include an 18.4 cents-per-gallon federal tax on gas and a 24.4 cents-per-gallon federal tax on diesel fuel. Biden also wants states to suspend their own gas taxes, which run an average of 30 cents on the gallon

With gas prices averaging about $5 a gallon nationwide, Americans could save about 3.6 percent at the pump if the gas savings are fully passed along to consumers. However, many economists and lawmakers from both parties say such a move could increase demand. 

During the 2008 presidential election as the U.S struggled with the Great Recession, Barack Obama called the idea of a gas tax holiday a “gimmick” that allowed politicians to “say that they did something.” He also warned that oil companies could increase their prices to offset the tax relief.

“We’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something,” Obama said at an Indianapolis rally a week before the 2008 primaries in Indiana.


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“Well, let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election,” Obama said, calling instead for middle-class tax cuts.

Obama’s stance on a gas tax holiday flip-flopped during his career. Earlier in his career as an Illinois legislator, Obama voted at least three times to temporarily lift the state’s 5 percent sales tax on gasoline, according to an April 30, 2008 report in the Columbus Dispatch.

“High gas prices pose a fundamental threat to Biden’s political and policy ambitions,” Matthew Daly wrote for the Associated Press. “They’ve caused confidence in the economy to slump, contributed to record inflation and (add) to the formidable challenges that Democrats face in keeping control of the House and the Senate in November.”

Rep. Peter DeFazio, chairman of the House Committee on Transportation and Infrastructure, expressed concerns about the proposal. “Although well-intentioned, this policy would at best achieve only minuscule relief while blowing a $10 billion dollar hole in the Highway Trust Fund that would need to be filled if we want to continue to fix crumbling bridges …”

Mark Zandi, chief economist at Moody’s Analytics, estimated that most of the 8.6 percent U.S. inflation in the past year is due to higher commodity prices from Russia’s invasion of Ukraine and continued covid 19 disruptions.

The U.S. produced more oil under the first year of the Biden administration than during the first two years of the Trump administration and it’s on track to set new records next year, according to the White House

Photo: A customer pump diesel fuel at a Madison, Miss., Sam’s Club, May 24, 2022. (AP Photo/Rogelio V. Solis)

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