KEY POINTS
- President Donald Trump stated his administration is considering a temporary suspension of the federal gasoline tax to help lower high energy costs ahead of November’s midterm elections.
- Pausing the 18.4 cents-per-gallon federal levy would require congressional action, an unlikely outcome before the midterms given that both the House and Senate have left Washington to campaign.
- A suspension would save drivers between 10 and 16 cents a gallon but would cost the government billions in lost revenue needed for highways, bridges, and mass transit.
MAIN STORY
President Donald Trump said that he is weighing a potential suspension of the federal gas tax as his administration looks for ways to ease high energy costs ahead of November’s midterm elections.
When asked by a reporter whether the tax would be suspended, Trump responded that the administration is thinking about the idea, though he did not provide additional details on how seriously the proposal is being evaluated or any concrete steps to advance it in Congress. Trump has previously voiced support for a temporary pause on the 18.4 cents-per-gallon federal levy. However, implementing such a pause requires congressional approval—an unlikely prospect prior to the midterms because both the House and Senate have already left Washington to campaign. Meanwhile, a handful of governors have moved independently to suspend or ease state gasoline taxes.
The president has faced growing pressure from voters to alleviate the high cost of living, including expenses for fuel, groceries, healthcare, and housing. With upcoming elections hinging heavily on affordability concerns, Trump’s Republican Party risks losing control of Congress as polls show voter dissatisfaction regarding the economic agenda and the handling of the Iran war.
The proposal also faces practical hurdles. Researchers at the Bipartisan Policy Center estimated in April that a federal gas tax pause would lower pump prices by roughly 10 to 16 cents a gallon, against a national average of $4.37 per gallon.
Furthermore, suspending the tax which has not been raised since the early 1990s and funds national highway, bridge, and mass transit projects, would result in billions of dollars in lost monthly revenue, forcing Congress to either cut construction spending or find alternative funding sources.
THE ISSUES
- Political pressures mounting on the administration to curb soaring energy costs and cost-of-living expenses ahead of midterm elections.
- The legislative and financial trade-offs of suspending a federal tax that funds crucial infrastructure projects and highway maintenance.
WHAT’S BEING SAID
“Well, we’re thinking about that.”
- President Donald Trump
WHAT’S NEXT
With Congress currently recessed for campaigning, any serious legislative effort to suspend the federal gas tax is stalled until after the midterm elections.
BOTTOM LINE
President Trump is evaluating a temporary suspension of the federal gas tax to address voter concerns over high energy costs, though legislative hurdles and funding gaps make immediate action unlikely before November.
Bloomberg
