Trump and Republicans Weigh Federal Gas Tax Suspension as Iran War Bites
The White House and Republican congressional leaders are weighing a temporary suspension of the 18.4-cent federal gasoline tax as the Iran war pushes US pump prices toward record highs. Officials told CNBC a decision could come within days. The move would strip roughly $25 billion a year from the Highway Trust Fund.
The proposal, floated jointly by the White House and Republican congressional leaders, would suspend the 18.4-cent-per-gallon federal gasoline tax for an unspecified period. CNBC reports the talks gained urgency this week as Brent crude held above $100 a barrel and the Iran conflict showed no sign of cooling.
A suspension would shave roughly five cents off pump prices in most states once tax incidence is accounted for, analysts said. The Highway Trust Fund, which depends on the levy to finance road and bridge repairs, would lose about $25 billion a year, forcing either deeper deficits or cuts to existing infrastructure spending.
Democrats said any holiday should be paired with a windfall tax on oil majors. Senate Republicans signaled openness if the pause is short and tied to a clear end-date for the Iran war. The Treasury has not provided a formal cost estimate, but officials told CNBC a decision could come within days.
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