President Donald Trump’s plan for gas tax breaks to ease cost-of-living concerns is facing opposition not only from his political enemies, but also from the Republican-leaning trucking and construction sectors.
Those industries rely heavily on road and transportation infrastructure projects funded by federal gas and diesel taxes.
“The gas tax holiday is a good way to plug a hole in the collection of revenue to finance highway and transit repairs, but it’s a bad way to help drivers who are impacted by higher gas prices,” said Brian Turmel, national spokesman for the Associated General Contractors of America, a construction industry trade group.
Gas prices have risen nearly 50% since the Iran war began on Feb. 28, reaching $4.50 a gallon on Tuesday. according to aaa. Diesel used in trucks and construction equipment is more than $5.64 a gallon. Iran has largely blocked the Strait of Hormuz, through which a fifth of the world’s trade passes. Oil Travels commonly.
Trump floated the idea of a gas tax holiday on Monday, though any such move would require action from Congress, which has sole authority over federal taxation. Republican lawmakers followed Trump’s proposal by introducing legislation that would allow a cap on the 18.4-cent per gallon federal gas tax and 24.4-cent diesel tax.
The federal gas tax primarily funds Highway Trust FundThe money raised is used on federal highway construction, maintenance, public transit, and infrastructure projects. That money is critical to some industries, including trucking and construction, that either rely on federal roads or are contracted to complete infrastructure projects.
Opponents of the gas tax holidays — including a trio of trucking groups that spoke against the proposal on Monday — argue that consumers get little savings since the moratorium is implemented at the wholesale level. Instead of providing relief, a pause could deplete the Highway Trust Fund.
“Without replacement funding, fuel tax revenues that support critical investments in highway safety and infrastructure projects will evaporate, hindering the safe and efficient movement of people and goods across the country,” the American Trucking Association, Truckload Carriers Association and National Tank Truck Carriers said. wrote.
Some congressional Democrats have offered similar arguments, claiming that a gas tax break would be a huge relief to consumers and that the only real way to lower gas prices is to end the war in Iran.
Senate Minority Leader Chuck Schumer, D-N.Y., said from the Senate floor on Tuesday, “Eighteen cents a gallon of gas tax relief doesn’t even come close to the $1.50 gas price increase from this war, and Republicans need to stop pretending it doesn’t.” “Offering Americans literally pennies on the dollar to deal with skyrocketing gas prices won’t cut it – 18 cents is not $1.50.”
Budget constraints could also complicate Trump’s gas tax break plan. and this National debt It is in the news again after crossing 100% of GDP in early May.
Even a short-term pause on the gas tax could prove costly. Estimates of the Committee for a Responsible Federal Budget It said in March that a three-month furlough without adding a separate federal revenue source could add $10.5 billion to the deficit.
In Congress, the gas tax issue does not break clearly along partisan lines.
Some Republicans rushed to support Trump’s proposal. Rep. Anna Paulina Luna, R-Fla., said Monday she would introduce legislation to suspend the federal gas tax, though she did not provide details. And Sen. Josh Hawley, R-MO, introduced a bill that would pause the gas tax for at least 90 days.
And a handful of Democrats are open to the idea.
James Tallarico, a Texas state Assemblyman and Democratic candidate for Senate, called for a moratorium on the federal gas tax last month. And Rep. Brandon Boyle, D-Penn., ranking member of the House Budget Committee, introduced legislation this year that Suspend the federal gas tax Whenever the national average exceeds $4 per gallon.
But some Republicans also appeared skeptical.
“The gas tax certainly pays for highways and bridges, and so if you suspend it, it means you don’t have money in the highway trust fund. But as a temporary measure, I can live with it,” Senator John Cornyn, R-Texas, said Tuesday.
Senator John Hoeven, R-N.D., similarly said he could live with a gas tax holiday on a temporary basis, but he is more focused on opening the Strait of Hormuz. “Because that’s what will bring down gas prices the fastest and most significantly,” Hoeven said.
Senate Majority Leader John Thune, R.S.D. told reporters Tuesday that he is opposed to past efforts to halt the federal gas tax, such as when President Joe Biden proposed a similar measure in 2022 after prices soared after Russia’s invasion of Ukraine.
“If you pick it up, does it ultimately get to the consumer, the customer, the buyer, or does it get sucked up somewhere in the supply chain?” Thune said. “I think these are all fair questions to ask, but I think it’s a conversation we’re willing to have, and I’m certainly willing to hear the president’s arguments.
— emily wilkins And Karen Sloan Contributed to this story.