REHOBOTH BEACH, Del. — (AP) — President Joe Biden said Monday he will decide by the end of the week whether to support a federal tax break on gasoline, potentially saving American consumers up to 18.4 cents a gallon.
“Yes, I am considering it,” Biden told reporters after taking a walk on the beach near his Delaware vacation home. “I hope to have a decision based on the data, I’m looking at the end of the week.”
The administration is increasingly looking for ways to save the public from higher prices at the pump, which started rising last year and rose after Russia invaded Ukraine in February. Gas prices across the country average just under $5 a gallon, according to AAA.
Biden said members of his team would meet this week with CEOs of major oil companies to discuss rising prices. Biden lashed out at oil companies, saying they are making excessive profits when people feel the crisis of skyrocketing costs at the pump and inflation. But Biden said he himself would not meet with the oil executives.
“I want an explanation as to why they are not refining more oil,” Biden said.
The Biden administration has already released oil from the US strategic reserve and increased ethanol blending for the summer, as well as sending a letter last week to oil refiners urging them to increase their refining capacity. However, those efforts have yet to reduce price pressures significantly, so the administration is now considering an exemption from the gasoline tax. Taxes on gasoline and diesel help pay for the roads.
Penn Wharton’s budget model released estimates Wednesday showing consumers saved at the pump because of gas tax breaks in Connecticut, Georgia and Maryland. Most of the savings went to consumers, rather than service stations and others in the energy sector.
Energy Secretary Jennifer Granholm, in a Sunday interview on CNN’s “State of the Union,” warned that “part of the challenge with the gas tax, of course, is that it funds highways.”
But Treasury Secretary Janet Yellen said Monday that “consumers are really hurt by higher gas prices” and remained open to a gas tax exemption.
“It’s been a substantial burden on American households and I think while it’s not perfect, it’s something that should be looked at as policy to address it,” Yellen said in Toronto at a joint news conference Monday with the Canadian deputy prime minister and the Finance Minister Chrystia Freeland.
An exemption from the gasoline tax would likely face an uphill climb for congressional approval. Democrats have a slim majority, and both Democratic House Speaker Nancy Pelosi and Senate Minority Leader Mitch McConnell have expressed skepticism in the past about such a move.
A White House official, who insisted on anonymity to discuss options on gasoline prices, said talks are ongoing and Biden wants to explore every avenue to lower prices.
Oil refiners say their capacity to produce additional gas and diesel is limited, meaning prices could remain high unless demand starts to ease.
The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers sent a joint letter to Biden on Wednesday who said refineries are already operating near full capacity and nearly half of the offline capacity was due to facilities being converted to renewable fuel production.
“The current situation did not materialize overnight and will not be resolved quickly,” the letter said. “To protect and promote America’s energy security and refining capacity, we urge you to take steps to encourage increased domestic energy production,” including new infrastructure and reduced regulatory burdens.
Strolling along the beach with his daughter Ashley, his granddaughter Naomi and his granddaughter’s fiancé, Biden stopped frequently to chat with sunbathers spending the June 16 federal holiday at the beach.
He took a moment to offer reassurance on inflation (the consumer price index rose to a nearly 40-year high of 8.6% in May from the same month a year ago) and growing warnings from economists that a recession may be just around the corner.
“We’re going to get through this, guys,” Biden told a group of beachgoers.
Last week, the Federal Reserve stepped up its push to rein in inflation by raising its key interest rate by three-quarters of a point, its biggest increase in nearly three decades, signaling more major rate hikes to come.
Former Treasury Secretary Larry Summers told NBC’s “Meet the Press” on Sunday that, in his view, “the overriding probability would be that by the end of next year we would see a recession in the US economy.”
Biden said he spoke with Summers, who served as Treasury secretary in the Clinton administration, on Monday morning.
“There is nothing inevitable about a recession,” Biden said.
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Book reported from Baltimore. AP reporter Rob Gillies contributed from Toronto.
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