Biden may soon back a gas tax waiver — plus discount cards — to address pain at the pump – Deltaplex News
(WASHINGTON) — As top White House officials reiterate that tackling high inflation remains President Joe Biden’s top priority, his administration is debating strategies to bring prices down — and sending mixed signals about how and how quickly Biden can act on an issue that is top of mind with voters and weighing on his approval ratings.
The president said Monday he could make a decision as soon as this week on whether to support Congress in instituting a break on the federal gas tax of 18.4 cents per gallon, which experts say could lower prices by about 14.72 cents per gallon.
Treasury Secretary Janet Yellen said Sunday the administration was open to considering such a move, citing the cost to consumers. On Monday, the national average gasoline price was $4.98 a gallon.
“Gas prices have gone up a lot, and that’s clearly weighing on households,” Yellen said during an appearance on “This Week” with George Stephanopoulos. “So [the president] is ready to work with Congress and [gas tax holidays are] an idea that is certainly worth considering.
But Yellen’s counterpart at the Department of Energy apparently disagreed with that notion during his own appearance on Sunday.
“Part of the challenge with the gas tax, of course, is that it funds roads,” Energy Secretary Jennifer Granholm told CNN. “[W]We just did a big infrastructure bill to help fund the roads. So if we do that – if we take away the gas tax – that takes away the funding that was just passed by Congress to be able to do that.
“That’s one of the challenges. But I’m not saying it’s not on the table,” Granholm said.
A gas tax exemption would require approval from Congress, where Democrats hold a frail majority. House Speaker Nancy Pelosi has previously expressed skepticism of the idea, saying it may be better “PR” than policy.
Biden told reporters on Monday that, as another relief measure, gas rebate cards were also being considered.
“That’s part of what we’re looking at,” he said when asked. “It’s part of the whole operation.”
It’s unclear, however, how these discount cards would work – whether they would be preloaded or provide post-purchase discounts.
A recession is not guaranteed: White House
Administration officials are united on one point: a recession is “not inevitable,” they all said.
“There is nothing inevitable about a recession,” Biden said Monday.
Yellen, Granholm and National Economic Council Director Brian Deese also all used variations of the language during their Sunday broadcast appearances.
“There are a lot of things about the economy right now that are unique,” Deese said. “Americans are spending less money on goods, they are spending more money on business services…Housing market recalibrating.”
Yellen acknowledged on Sunday that inflation was “unacceptably high”, again blaming Russia’s invasion of Ukraine and long-term supply chain issues as contributors.
“These factors are unlikely to decline immediately, but over time I certainly expect inflation to decline,” she said.
Still, she noted, “Consumer spending remains very strong. There is month-to-month volatility, but overall spending is strong. And, she added, “Bank balances are high. It is clear that most consumers, even low-income households, continue to have savings buffers.
As the Federal Reserve takes increasingly aggressive steps to curb inflation — raising interest rates by three-quarters of a percentage point, the biggest hike in nearly 30 years — Yellen said the goal was a delicate balancing act.
“[Fed] Chair [Jerome] Powell said his goal was to bring inflation down while maintaining a strong labor market. It’s going to take skill and luck, but I believe it’s possible,” she said on Sunday.
As the administration insists there is a way to avoid recession while keeping inflation under control, Republican lawmakers are taking the opportunity to hammer Biden on higher prices — a key talking point for the GOP before the November midterm elections.
“Bidenflation is costing average Americans an extra $460 a month,” Pennsylvania Rep. Lloyd Smucker tweeted Monday.
Officials weigh more economic measures
Biden made it clear on Monday that he was not planning to meet oil executives in person, but was instead tasking senior aides, such as Granholm, with clarifying his administration’s position.
In a letter last Wednesday, Biden called out seven oil refiners for making record profits as oil supplies dwindle. He asked the companies to increase production or risk intervention from the White House.
Although the president did not specifically identify the tools he might use, Granholm hinted during a Wednesday appearance on CNN that the Defense Production Act might be on the table.
In his letter, Biden also asked his energy secretary to call an emergency meeting with oil company executives.
Granholm will probe companies to explain the oil refining capacity cuts, according to an ABC News report. Trade groups representing producers say that “US refineries are operating at 94% capacity.”
The American Petroleum Institute also hit back at Biden’s letter, with its CEO and chairman arguing it was “the administration’s misguided policy agenda moving away from domestic oil and natural gas.” [that] has compounded inflationary pressures and added headwinds to the day-to-day efforts of businesses to meet growing energy needs while reducing emissions.
Separately, Yellen told federal lawmakers earlier this month that his department was reviewing Trump-era tariffs targeting China.
In a March policy brief, economists said “eliminating tariffs would save U.S. businesses and households about $81 billion a year on direct purchases from China.”
Asked about his position on eliminating those tariffs on Saturday, the president said: “We are still making a decision.”
ABC News’ Justin Gomez contributed to this report.
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