Judy: 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.
Pres. Biden: 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.
Judy: White house correspondent
Laura barron-lopez has been
reporting on the president's
proposal, and joins me now to
discuss.
Hello, Laura.
Tell us what is the effect of
this proposal expected to be and
how is it you received?
Laura: This would go into effect
for three months if congress
ultimately decides to pass it.
That is the big if right now.
Currently the federal gas tax is
about $.18.
The federal diesel tax is
roughly $.24.
So they have not been touched
since 1983.
They have not been increased at
all.
Right now 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 it's very
helpful to consumers.
I was speaking to a Harvard
economist and former Obama
administration and economic
advisor today.
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.
The big question is whether or
not those oil companies then
decide to lower the prices at
the pump because of theprofits
they are receiving.
Our colleague Lisa has heard a
lot from democratic leadership
today that right now, the votes
just aren't there on the hill
for this.
Judy: So ultimately, how much
power does the president have to
do anything about gas prices, to
do anything about inflation over
all, and do we know, is the
administration planning to do
anything else?
Laura: There are a lot of other
options the administration is
considering.
At the end of the day, 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 household goods,
bicycles, etc..
That is something they are
considering right now.
Another thing is that the energy
department secretary Jennifer
Granholm is about to meet
tomorrow with oil executives.
She said she will push them to
try to use the profits they will
ultimately get back if a gas tax
holiday is demented.
The profits they are 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 duking
back and forth between oil
executives and president Biden
lately so it remains to be seen
whether or not those
conversations go anywhere.
Another big way there could be
an impact on inflation comes
down to the federal reserve.
Federal reserve chairman Jerome
Powell was testifying before
senators today about the
possibility of interest rate
raise and what impact that would
have on the economy.
>> Do you agree that interest
rates go to high, too fast that
it could? Driveus into a
recession
?
>> Certainly a possibility.
It is not the intended outcome
but it is a possibility.
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%
inflation and still a strong
labor market.
Laura: We heard Powell say a
recession is a possibility.
Not likely.
We heard a rosier picture from
the white house.
Biden has repeated again and
again that he thinks it is not
inevitable and to really try to
tell the public should not be
worried about it just yet.
Judy: Significant acknowledgment
by the fed chair.
All of this is happening while
the midterm elections just five
months away right now, right now
we know the president's approval
rating hovering on average
around 40%.
What do we know about how voters
might react to a gas tax?
Laura: I was spoke -- talking to
democratic pollsters and they
say it is popular with voters.
At the end of the day they
acknowledge the reality that it
is marginal savings, but voters
in polling and status -- focus
groups, 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 and calling on states
to follow suit and suspend their
state gas taxes.
So she said the more they see
him out there creating a record
of attempts to try to curb
inflation and curb gas prices,
the better off it is for him as
well as Democrats into November.
Judy: Of course all this happens
in a political environment.
At the same time, people are
watching how much everything
costs.