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Biden calls for 3-month halt to federal gas tax

Biden to announce plan Wednesday afternoon
Iowa Gas Prices
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President Joe Biden urged Congress to suspend the federal gas tax to provide some relief to the high prices at filling stations.

The federal gas tax is 18.4 cents per gallon for regular gas and 24.4 cents a gallon on diesel. The money is used to pay for road projects, often on interstates.

The White House estimates that eliminating the gas tax would cause revenue for the Highway Trust Fund to drop by $10 billion. The Biden administration said due to a $1.6 trillion drop in the deficit, the government can afford to suspend the gas tax while using other revenues to make the Highway Trust Fund whole.

Biden also called on states to suspend their gas tax or find other solutions to lower prices at the pump. On average, states charge a tax of 31 cents a gallon on regular gas and 32 cents a gallon on diesel.

Biden urged the oil industry to pass on any savings to consumers.

"I'm doing my part. I want the Congress, the states, and the industry to do their part as well," he said.

While AAA reported that gas prices dropped below $5 per gallon on Saturday, the current rate of $4.95 a gallon remains $1.89 more than a year ago.

Biden noted, however, that prices at the pump arent falling as quickly as they rise when oil is high.

"The price of oil has fallen by more than $10 a barrel. Normally, this would reduce the cost at the pump by about 25 cents a gallon. Yet, so far, gas stations have only reduced prices by a few cents," Biden said.

"Bring down the price you are charging at the pump," he added

Biden attempted to blame the Russian invasion of Ukraine on high gas prices. While prices have gone up since the war started, gas prices were already elevated from the year prior.