Biden's proposal for a three month gas-tax holiday, the same one which his predecessor in the White House Barack Obama joked about opposing before the 2008 election...
Irony.— Dawn Kopecki (@Dawn_Kopecki) June 22, 2022
Obama boasted about opposing federal gas tax holiday before 2008 election — Biden now wants one https://t.co/zgY0HduSva
... and which would cut the price of gasoline by a whopping 18 cents/gallon if it were to pass... isn't going to pass:
- REPUBLICAN U.S. SENATOR THUNE: BIDEN'S GAS TAX HOLIDAY IS DEAD ON ARRIVAL IN CONGRESS
Even Biden's own Democrats refuse to commit:
“We will see where the consensus lies on a path forward for the President’s proposal in the House and the Senate" said Pelosi.
In any case, according to Goldman - which thinks the odds are less than even that Congress votes to suspend the tax, nor are many states expected to suspend their own taxes - Congressional action is unlikely before the upcoming 4th of July recess, and after that, the odds are less than even that Congress votes to suspend the tax. Still, there is a modest chance of enactment, as even skeptical lawmakers might feel compelled to support a suspension if the issue comes up for a vote, and Democratic leaders control the calendar and could come under pressure to schedule such a vote.
What is more interesting than Biden's insistence on pushing through this fact-sheet which will almost certainly die quietly in some corridor in the Capitol, is what is omits which perhaps not surprisingly are things that actually could lower the price of gas, if only briefly. As we noted last week, recent media reports indicated the White House was considering proposing a $400 gas rebate card for households, though since this was just another stimulus, it never seemed likely and it seems less likely with today’s proposal. Among the more actionable and impactful ideas that the White House could have pursued are:
Regulatory changes which the White House could make without Congress, including issuing Reid VaporPressure (RVP) waivers, and which would allow the sale of cheaper winter-blend gasoline during the summer
Jones Act waivers, which would allow generally less expensive foreign vessels to transport fuel between US ports
Easing the Renewable Volume Obligation (RVO), which has seen increased compliance costs for refiners as Renewable Identification Numbers (RINs)—the credits purchased to comply with the program—have traded substantially higher over the last two years.
Goldman noted that these likely would have met opposition from environmentalists, labor unions, and/or the agricultural sector, whereas a tax suspension does not affect any particular constituency (assuming the lost revenue to the Highway Trust Fund is made up through a general revenue transfer, as would occur under most recent congressional proposals to suspend the tax, it would have no impact on infrastructure spending, which would otherwise be a concern for the construction sector).
Ironically, it is those same entities - the environmentalists whispering in Biden's ear, alongside the labor unions and so on, who together with the Fed, have pushed the ESG lunacy beyond the breaking point and it is they, not Putin (whose oil is actually selling at about $80/bbl or about a $30 discount from spot), that one should look toward when casting blame for today's record gas prices.