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President Biden is calling on Congress to temporarily suspend the federal gas tax. The president told reporters at an event Wednesday that he knows the proposal isn’t a permanent solution to rising prices at the pump. White House correspondent Laura Barrón-López has been reporting on the plan, and joins Judy Woodruff to discuss.
President Biden is calling on Congress to temporarily suspend the federal gas tax. The president told reporters today that he knows the proposal is not a permanent solution to rising prices at the pump.
President Joe Biden:
Now, I fully understand that a gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief, just a little bit of breathing room, as we continue working to bring down prices for the long haul.
White House correspondent Laura Barrón-López has been reporting on the president's proposal, and she joins me now to discuss.
So, hello, Laura.
Tell us, what is the effect of this proposal expected to be and how is it you received?
So, this proposal would go into effect for three months if Congress ultimately decides to pass it. That's a big if right now. And so, currently, the federal gas tax is about 18 cents and the federal diesel tax is roughly 24 cents. And so they have haven't been touched since 1993.
They haven't been increased at all. And, right now, the average price of gas is about $4.95. But the reception has been lukewarm, at best, from members on the Hill, including members within Biden's own party. Speaker Pelosi has in the past called the idea of suspending the gas tax essentially a con and she doesn't think that it's very helpful to consumers.
And I was speaking to Jason Furman, a Harvard economist and former Obama administration economic adviser today, and he said that consumers will get about a few cents back at the gas pump, but that ultimately oil companies will receive billions in profits.
And so the big question there is whether or not those oil companies then decide to lower the prices at the pump because of the profits that they're receiving.
And our colleague Lisa Desjardins has heard a lot from Democratic leadership sources today that, right now, the votes just aren't there on the Hill for this.
So, ultimately, how much power does the president have to do anything about gas prices, to do anything about inflation overall? And, do we know, is the administration planning to do any — try to do anything else?
So there are a lot of other options that the administration is considering.
At the end of the day, Judy, there are a lot of limitations on President Biden and what he can ultimately do not just for gas prices, but also inflation more broadly. One thing the White House is considering is lifting China tariffs on some household goods, bicycles, et cetera.
That's something that they're considering right now. Another thing is that the Energy Department secretary, Jennifer Granholm, is about to meet tomorrow with oil executives. And she's really going to push them, she said today to reporters, to try to again use the profits that they're going to ultimately get back if a gas tax holiday is implemented.
And the profits that they're getting right now, she is going to try to push them to send that back to the consumer, to lower prices at the pump. Now, there's been a bit of a duking back and forth between oil executives and President Biden lately. So it remains to be seen whether or not those conversations go anywhere.
But another big way that they — there could be an impact on inflation comes down to the Federal Reserve. And so Federal Reserve Chairman Jerome Powell was testifying before senators today about the possibility of an interest rate raise and what impact that would have on the economy.
Sen. Jon Tester (D-MT):
Do you agree with perspective that, if interest rates go too high too fast, that it could drive us into a recession?
Jerome Powell, Federal Reserve Chairman:
It's certainly a possibility. It's not our intended outcome at all. But it's certainly a possibility. And, frankly, the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2 percent inflation, and still a strong labor market.
So, we heard Powell there say that a recession is a possibility, not likely. We have heard a rosier picture from the White House, essentially.
Biden has repeated again and again that he thinks that it is not inevitable and to really try to tell the public to not be worried about it just yet.
Pretty significant acknowledgement there by the Fed chair.
So, all this is happening, Laura, the midterm elections just five months away. Right now, we know the president's approval rating hovering, on average, about 40 percent. What do we know about how voters might react to a gas tax suspension?
So I was talking to Democratic pollsters today, and they say that this is really popular with voters, that, at the end of the day, they acknowledge the reality that it is marginal savings for consumers and for voters, but voters in polling and in focus groups have told veteran Democratic pollster Celinda Lake, who actually worked on President Biden's presidential campaign — she said they want to see the president do everything at his disposal, even if it is something like he did today, which is simply calling on Congress, calling on states to follow suit and also suspend their state gas taxes.
So, she said that, the more that they see him out there creating a record of attempts to try to curb inflation, to try to curb gas prices, then she said the better off it is for him, as well as Democrats heading into November.
Of course, all this happens in a political environment. At the same time, people are watching how much everything costs.
Laura Barrón-López, thank you.
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