Lawmakers split over suspending federal gas tax

U.S.

(NewsNation) — As gas prices surge across the country, some lawmakers are pushing to suspend the federal gas tax, while others say cutting the tax will do more harm than good.

In February, Sen. Mark Kelly (D-Ariz.) introduced a bill to pause the federal gas tax through the end of the year — a proposal supported by at least five Democratic senators.

Last week, Democratic governors from Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin signed on to the idea and urged congressional leaders in Washington to suspend the federal gas tax.

Right now, the tax is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.

Those in favor of the idea say suspending the gas tax will cut prices at the pump and provide some relief as Americans face skyrocketing inflation.

Opponents of the idea, including numerous legislators on both sides of the aisle, argue that cutting the gas tax would siphon money away from vital infrastructure projects.

“This is a gimmick to create the illusion of action while really doing nothing but draining the highway trust fund that we rely upon to build our roads and bridges,” said Sen. John Cornyn (R-Tex.).

States levy their own fuel taxes on top of federal taxes. The average state fuel tax works out to 32 cents per gallon for gasoline and 32.7 cents for diesel, according to the U.S. Energy Information Administration.

Some state lawmakers are done waiting for the federal government and have already suspended their state’s gas tax. In Maryland, Gov. Larry Hogan and top legislators agreed to a 30-day suspension of the gas tax, which is nearly 37 cents a gallon.

In Georgia, Gov. Brian Kemp intends to sign a bill suspending the state’s fuel tax through May after the state Senate voted 55-0 on Thursday to approve the measure. The gas tax in Georgia works out to 29.1 cents a gallon and 32.6 cents a gallon for diesel.

On Tuesday, lawmakers in Michigan voted to suspend the state’s 27.2 cents-a-gallon gas tax, but Gov. Gretchen Whitmer has signaled she will veto the bill. Instead, Whitmer joined Democratic governors calling to suspend the federal gas tax through the end of the year.

Cutting the federal gas tax is just one of the options congressional Democrats are considering, sources told NewsNation. Another option includes taxing oil companies and using the revenue generated as rebates for drivers. Some have even suggested another round of direct stimulus payments to offset rising gas costs.

Others, including multiple congressional Republicans, say suspending the gas tax is not a viable option. Instead, they argue that oil companies need to be incentivized to produce more to bring down prices.

“With the amount of regulation and the amount of fees and liability that we have put on our energy departments there’s no reason for our oil companies to invest right now,” said U.S. Rep. Mike Garcia (R-Calif.).

Oil prices have dropped below $100 a barrel in recent days after hitting $130 a barrel just a week ago. Today the average gas price is $4.27 a gallon, according to AAA. That’s slightly down from the $4.43 average earlier this week.

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