Obama called the gas tax exemption a “gimmick” in 2008, as Biden now says he’s considering it

President Joe Biden said Monday that he is considering creating a federal gas tax exemption, which could save Americans up to 18.4 cents a gallon, though his former boss, former President Barack Obama, called such a move a “gimmick.” “In the election campaign. in 2008.

Biden told reporters after taking a walk on the beach near his Delaware vacation home that he will decide by the end of the week whether to pause the federal gas tax.

“Yes, I am considering it,” Biden said. “I hope to have a decision based on the data, I’m looking at the end of the week.”

The president’s comments stand in stark contrast to the words of presidential candidate and then-Illinois senator Obama from 2008. Biden’s former boss said at the time that a gas tax exemption was a “trick” to save Americans half gas tank over the summer so lawmakers could “say they did something.

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“We don’t know if the oil companies will actually pass on the savings,” Obama said in a speech in North Carolina in April 2008. “So you’re saving 5% in terms of the gas tax. oil companies just raise prices by 5%. So you end up giving them more money. And we’ve emptied the Highway Trust Fund. Now, this is the problem with Washington. We’re facing a situation where oil prices could hit $200 a barrel.

“Oil companies like Shell and BP just reported record profits for the quarter and we’re discussing a hack to save half a tank of gas all summer long so everyone in Washington can pat themselves on the back and say they did something.” continuous.

The idea of ​​pausing the federal gas tax was supported by two opponents in the 2008 presidential race: former Arizona Republican senator John McCain and former New York Democratic senator Hillary Clinton.

Biden also said during his remarks Monday that members of his team will meet with CEOs of major oil companies this week to discuss rising prices at the pump.

His administration is evaluating options to ease the burden of record gasoline prices. The cost of gasoline began to skyrocket last fall and continued to rise following the Russian invasion of Ukraine in late February.

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National average gas prices currently sit at $4.98 per gallon, according to AAA. Prior to this year, the highest national average gas price ever recorded by AAA was $4,114 per gallon in July 2008.

The president accused oil refiners of driving up gasoline prices in letters sent last week to seven refinery operators, including ExxonMobil and BP.

“The sharp rise in gasoline prices is not due to rising oil prices alone, but to an unprecedented disconnect between the price of oil and the price of gasoline,” Biden’s letters read.

But oil refiners have said their capacity to produce additional gas and diesel is limited.

The American Petroleum Institute and American Fuel & Petrochemical Manufacturers sent a joint letter to Biden on Wednesday saying that refineries are already operating near full capacity and nearly half of the offline capacity was due to facilities being converted to production. of renewable energy.

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“Today’s situation did not materialize overnight and will not be resolved quickly,” the letter said. “To protect and advance America’s energy security and refining capacity, we urge you to take steps to encourage more domestic energy production, including new infrastructure and reduced regulatory burdens.”

Penn Wharton’s budget model released estimates Wednesday showing that gas tax breaks in Georgia, Maryland and Connecticut saved consumers money at the pump. Most of the savings went to consumers, not to service stations and others in the energy sector.

Treasury Secretary Janet Yellen said in Toronto on Monday at a joint news conference with Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland that consumers “are really suffering from higher gas prices” and suggested that it is open to a gasoline tax exemption.

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“It’s been a substantial burden on American households and I think while it’s not perfect, it’s something that should be considered as a policy to address it,” Yellen said.

However, Energy Secretary Jennifer Granholm said Sunday on CNN’s “State of the Union” that “part of the challenge with the gas tax, of course, is that it funds highways.”

House Speaker Nancy Pelosi and Senate Minority Leader Mitch McConnell have previously expressed skepticism about pausing the federal gas tax.