Trump faces uphill climb on suspending gas tax
· Axios
President Trump's endorsement of suspending federal gas taxes pushes the idea higher on the political radar, but it still faces long odds.
Why it matters: Some Republicans rushed to introduce bills, and a few Democrats have already endorsed the idea — but there are still serious obstacles that could keep Trump's comments from becoming reality.
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- The federal tax is 18.3 cents for gasoline and 24.3 cents for diesel (with another .1 cent fee for addressing leaking underground tanks).
A few dynamics to watch following Trump's comments to CBS News...
📜 Capitol Hill. Trump needs Congress to act, and the immediate signs are mixed. GOP lawmakers including Sen. Josh Hawley (R-Mo.) quickly promised legislation, but Senate Majority Leader John Thune was noncommittal.
- "I've not in the past obviously been a fan of that idea. But you know I've got some colleagues out there who think it's a good idea and so we'll hear them out," he told reporters.
- Thune noted the revenue loss could hurt the Highway Trust Fund, and said "the best thing [that] can happen for gas prices is for the [Strait of Hormuz] to get opened up again."
💪 The White House political operation. It's hard to know whether it's something Trump's team will truly push, or instead one of his frequent musings, or something in between.
🗳️ It's a 2028 thing. Several potential White House hopefuls have now pushed to temporarily nix the tax.
- They would be Sen. Mark Kelly (D-Ariz.), Hawley, and Kentucky Gov. Andy Beshear.
🤷 The politics and plans remain in flux. Senate Minority Leader Chuck Schumer (D-N.Y.) isn't exactly shooting down the idea, but in a floor speech Monday, he took the position that it's not enough.
- "[L]et's not pretend 18-cents of gas tax relief per gallon makes up for the damage Trump created with this war," Schumer said. "Eighteen cents isn't a dollar-fifty — which is how much the price of gas has gone up since the war started."
- "The best way to lower costs is to end this illegal war."
- Aides to House Speaker Mike Johnson (R-La.) and House Minority Leader Hakeem Jeffries (D-N.Y.) didn't respond to requests for comment.
💵 The numbers are daunting. One reason a waiver has never happened — despite surfacing often when prices spike — is the budget impact is big even while consumer relief is modest.
- The revenue effect and loss to the Highway Trust Fund — which supports roads, bridges and transit — depends on the duration and how it's structured.
- For instance, Kelly's plan would divert other monies to the fund. But a holiday of any length is expensive for Uncle Sam.
- The research firm ClearView Energy Partners said a hypothetical gas tax waiver from May 15 to Nov. 30 would cost nearly $14 billion. Add in other fuels, and the price climbs a lot more.
The bottom line: The high costs and revenue loss for highways "might ordinarily produce lethal sticker shock on Capitol Hill," ClearView said in a client note.
- "But in a mid-term election year where both parties are in no-holds barred pursuit of Congressional control, we cannot wholly rule it out."
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