Biden eyes a fed gas tax holiday

The Biden administration is considering instituting a federal gas-tax holiday as the average price of a gallon of regular has soared above $5 — and the White House economic team could take up the matter later this week, according to a report.

The administration is scrambling to come up with solutions to ease Americans’ pain at the pump with inflation hitting 40-year highs and Democrats fearing economic turmoil that would doom their chances in this fall’s midterm elections.

“It’s definitely an option on the table,” a Democrat close to the White House told The Hill on Monday.

A suspension of the federal gas tax — currently 18.3 cents per gallon of regular and 24.3 cents per gallon of diesel — would require congressional action.

Former UBS CEO Robert Wolf, an economic adviser to former President Barack Obama, told The Hill he supports a federal gas tax holiday but only for the duration of Russia’s war in Ukraine, which he said has affected the global supply of oil and driven up prices.

“I know that some may view this as somewhat gimmicky because it will revert itself at some point, but a majority of the recent gas hike since the beginning of the year has been due to the Russian invasion,” Wolf said. “I think tying it solely to the war and setting an end date makes it more strategic and smart.”

Several states, including New York, have enacted gas-tax holidays, and Wolf said he thinks President Biden could press states that have not yet gotten on board.

Still, critics argue that a gas-tax holiday wouldn’t really help motorists that much.

Suspending the federal tax into December would save motorists only $16 to $47 during that time, according to the Penn Wharton Budget Model released earlier this year.