(The Center Square) – With the national average gas price hovering around $4.37 per gallon, some Republicans are pushing for a temporary suspension of the federal gas tax.
Doing so would provide Americans some savings at the pump, but it would also cost billions each month and potentially hasten the depletion of the struggling Highway Trust Fund.
The 18.4 cent per gallon federal gas tax is one of the primary revenue sources – around 58% – of the HTF, which funds the construction, maintenance and repair of U.S. roads, bridges and mass transit systems.
For years, the fund’s reserves have dwindled as the gas tax hasn't risen since 1993, despite inflation increasing by more than 110% since then. The Congressional Budget Office estimates that the HTF will be fully depleted by 2028.
Suspending the federal gas tax for 30 days would cost $2.5 billion ($3.5 billion if the federal diesel tax were suspended as well), while suspending it for three months would cost $7 billion, the Committee for a Responsible Budget estimates.
Depending on the length of the tax holiday, it could hasten the HTF insolvency deadline anywhere from one week to 17 months earlier than predicted, according to the CRFB.
Because of this, lawmakers who have introduced legislation to suspend the federal gas tax have also included offsets for the HTF revenue loss. U.S. Rep. Russell Fry’s, R-S.C., EASE Act, introduced Oct. 1, would allow the president to declare a state of emergency and impose an up to 120-day suspension of the federal gas tax.
It would fund the holiday by authorizing the U.S. Treasury to transfer from the general fund and the Leaking Underground Storage Tank Trust Fund the corresponding amount of revenue lost to the HTF.
Still, the bill would add billions to the national debt while gas prices would fall by only 10 to 16 cents per gallon on average, the Bipartisan Policy Center estimates.
But rising prices due to the U.S.-Iran conflict have become a political flashpoint ahead of the midterm elections, prompting other Republicans to push for suspending the federal gas tax.
Both Sens. Mike Rounds, R-S.D., and Bernie Moreno, R-Ohio, separately requested last week that Trump signal his approval of Congress authorizing a gas tax holiday. Ohio, Georgia and Indiana have temporarily suspended their own state taxes on gas.
Although President Donald Trump first expressed openness in May to the idea of suspending the federal gas tax, as of Monday he remained noncommittal, telling a reporter that he is “thinking about that.”
Trump did sign an executive order Monday waiving penalty fees for the use of dyed diesel fuel in trucks using public highways.
Originally published on thecentersquare.com, part of the BLOX Digital Content Exchange.
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