Proposed “gas tax holiday” legislation, introduced by Democrats in the House and the Senate, is getting pushback from other members of Congress and industry trade groups.
The Gas Prices Relief Act (S.3609), proposed by U.S. Sens. Mark Kelly (D-AZ) and Maggie Hassan (D-NH), sponsored by other Democratic senators up for election, would suspend until the end of the year the 18.4 cents per gallon tax on gasoline. Companion legislation was introduced in the House by U.S. Rep. Tom O’Halleran (D-AZ).
“Arizonans are paying some of the highest prices for gas we have seen in years, and it’s putting a strain on families who need to fill up the tank to get to work and school,“ Kelly said. “This bill will lower gas prices by suspending the federal gas tax through the end of the year to help Arizona families struggling with high costs for everything from gas to groceries.”
The move has been panned by lawmakers on both sides of the aisle and by transportation industry groups. Because federal highway and public transportation programs rely on gas and diesel taxes, the suspension of the taxes would leave a gap in funding to support construction and maintenance, just as legislation enacted at the end of last year, the Infrastructure Investment and Jobs Act, is set to begin.
“Suspending the 18.4 cents per gallon federal gas tax is not going to give consumers significant relief—if any at all. But suspending the tax will blow a $26 billion hole in the Highway Trust Fund this year and cause further delay in rebuilding our decrepit infrastructure and the tens of thousands of jobs that investment would have provided.” U.S. Rep. Peter DeFazio (D-OR), chair of the House Committee on Transportation and Infrastructure, said.
In a Feb. 17 letter to leaders in Congress, the Transportation Construction Coalition, co-chaired by the American Road and Transportation Builders Association (ARTBA), and Americans for Transportation Mobility said decreasing the tax on fuel would do little to lower the price.
“Proponents of the gasoline tax holiday, as proposed in S. 3609, suggest it would lower prices for consumers,” ATM wrote. “However, the view that federal fuel taxes have a discernible impact on prices at the pump misses the mark. The federal gasoline tax has not been increased since 1993 when gasoline was around $1.00 per gallon nationally. Meanwhile, gasoline prices have increased roughly 250 percent, which indicates other factors, like supply and demand, input costs, and geopolitics are drivers of price fluctuations–not federal fuel taxes.”
The proposed legislation has turned normal political stands upside down. Although Republicans are generally known for their love of tax cuts, in this instance, GOP leaders are coming out against the gas tax holiday.
“Democrats want to blow a $20 billion hole in highway funding so they can try to mask the effects of their own liberal policies on working Americans.” Senate Minority Leader Mitch McConnell (R-KY) said.
The proposal does not look likely to clear the Senate, however.
Senate Majority Leader Chuck Schumer (D-NY) told reporters last week that only “eight or nine” members of the Democratic caucus have signed on to the proposal. Other Democrats seemed fervent in their opposition to the proposal.
“It doesn’t make sense to me, just doesn’t make sense,” U.S. Sen. Joe Manchin (D-WV), chairman of the Energy Committee, told NBC News. “We’ve got a busted trust fund now. We’ve got to fix things.”