President Joe Biden assured this Monday that he is analyzing the possibility of temporarily eliminate the federal gas tax this week with the intention of reducing the record prices that fuel has reached.
Before a group of reporters covering the White House, the president assured that he is considering putting the pause, a measure that some legislators from his party have promoted as a way to reduce fuel prices at service stations.
“Well, I hope to have a decision based on the data that I’m looking for … by the end of the week,” Biden said Monday while vacationing in Rehoboth Beach, Delaware.
For every gallon of gasoline, the tax adds 18.3 cents. This means a savings of about $4 per tank fill, depending on the capacity of the car. If you take into account that we are in the summer vacation season – when many people travel – the savings could be felt even more.
A gallon of regular gas this week was just under $5, still much higher than a year ago, but also the first time in nine weeks that the weekly national average has fallen.
That average is now $4.98, according to the American Automobile Association (AAA). The drop doesn’t signal a quick decline to 2021 lows, though drivers could see modest declines in coming weeks, market experts say.
Treasury Secretary Janet Yellen told ABC on Sunday that the idea of lowering the gas tax is “one that is certainly worth considering.”
He added that President Joe Biden wants to “do everything possible to help consumers”.
Energy Secretary Jennifer Granholm, for her part, told CNN that “part of the challenge with the gas tax is, of course, that it finances highways.”
Both Secretary Granholm and Yellen reiterated Biden’s stance that a recession was “not inevitable,” and the Treasury secretary said the labor market and consumer spending remained strong. Mester also said that she was not forecasting a recession despite slowing growth.
The comments come as the Biden administration struggles to address the record gasoline prices and inflation, now at its highest in 40 years.
President Biden last week made a call to the oil majors to produce more gasoline and diesel, claiming that his profits have tripled in the context of the Russian invasion of Ukraine while Americans have to pay record prices at gas stations.
“The crisis families are facing deserves immediate action,” Biden wrote in a letter to oil refiners obtained by Associated Press. “Your companies must work with my administration to come up with concrete, short-term solutions that address the crisis.”
Long way to contain inflation
Headline inflation began to rise last year as the US economy began to recover from the coronavirus pandemic, but has accelerated in recent months with rising energy and food prices triggered by the Russian invasion of Ukraine. that disrupted global commodity markets.
The president of the Cleveland Federal Reserve, Loretta Mester, assured that it will take two years for inflation to move to the central bank’s 2% target, “falling” gradually.
Biden has recently said that he is considering removing some of the tariffs taxes to hundreds of billions of dollars worth of Chinese goods by Donald Trump in 2018 and 2019 against a backdrop of a bitter trade war between the world’s two largest economies.
The country’s national savings rate has fallen to around 6%, below pre-pandemic levels, after reaching 16.6% in 2020, the highest on record since 1948, and 12.7% in 2021.
“I anticipate the economy slowing down,” Yellen said. “It has been growing at a very high rate and the economy has recovered, and we have achieved absolute hiring. We anticipate a transition to steady, stable growth, but I don’t think a recession is inevitable.”