Trump Backs Temporary Federal Gas-Tax Cut as Iran War Fuels Price Spike

President Donald Trump told CBS News on Monday that he wants the federal gasoline tax suspended temporarily while U.S. fuel prices climb during the war with Iran. Speaking with reporters at the White House later, Trump said the tax should remain suspended "until it's appropriate." The president does not have the authority to suspend the tax unilaterally, and any change would require an act of Congress, according to the Associated Press.

The Details

In an interview with CBS News, Trump said the federal gasoline tax should be suspended "for a period of time" as prices rise amid the war with Iran. He tied the duration of the tax holiday to fuel prices, stating that he would want the levy restored once costs retreat. "When gas goes down," Trump said, according to CBS News, the tax should return to its current rate.

Trump later addressed the timeline in more detail during remarks to reporters at the White House. Asked how long the tax should remain suspended, he replied, "Until it's appropriate," according to the Associated Press. The answer left the end date open-ended and tied to market conditions rather than a fixed schedule.

The proposal arrives as American drivers confront sharply higher prices at the pump. Average U.S. regular gas prices have reached $4.52 per gallon, according to AAA figures cited by NPR and Houston Public Media. That average is more than 50 percent above the price before the U.S. bombing of Iran, the outlets reported, offering a benchmark for the scale of the increase.

The federal tax currently adds 18.4 cents to each gallon of gasoline and 24.4 cents to each gallon of diesel, according to NPR and Houston Public Media. Suspending the 18.4-cent gasoline tax would lower the current national average price by roughly 4 percent. For a driver filling a 12-gallon tank, the savings would amount to about $2.21, according to NPR and Houston Public Media.

The plan faces a major procedural obstacle. The president does not have the authority to suspend the federal gas tax on his own, the Associated Press reported. Only Congress can approve such a change, which means the proposal would need to pass both the House and Senate and be signed into law before taking effect.

On Capitol Hill, Republican lawmakers have split over the idea. Sen. Josh Hawley and Rep. Anna Paulina Luna have said they will introduce legislation to suspend the gas tax, according to the Associated Press. But Senate Majority Leader John Thune has voiced skepticism, citing the potential impact on the Highway Trust Fund, the news agency reported.

Thune told reporters he would listen to supporters of the measure despite his reservations. "You know, I've got some colleagues out there who think it's a good idea. So, we'll hear them out," he said, according to the Associated Press.

Context

The surge in fuel prices follows military tensions and blockades around the Strait of Hormuz that have disrupted oil tanker traffic in the region. Roughly one-fifth of the world's crude oil normally moves through the strategic waterway, according to NPR and Houston Public Media. The disruption has coincided with the climb in average U.S. gas prices to $4.52 per gallon, a level more than 50 percent above the average before the U.S. bombing of Iran, according to AAA figures cited by the outlets.

The federal gasoline tax is a major funding source for highway and public transit programs, generating more than $23 billion annually, the Associated Press reported. That revenue is directed to the Highway Trust Fund, the same program that Thune cited when voicing skepticism about the proposed suspension.

A suspension of the 18.4-cent gasoline tax would reduce the current average gas price by roughly 4 percent, or about $2.21 on a 12-gallon fill-up, according to NPR and Houston Public Media. The calculation reflects the gap between the current national average of $4.52 per gallon and the tax rate that Trump wants to eliminate for the duration of the price spike.

What's Next

Sen. Josh Hawley and Rep. Anna Paulina Luna have said they will introduce legislation to suspend the federal gas tax, according to the Associated Press. The bill would need to pass both chambers of Congress and be signed by the president before taking effect, since the executive branch cannot suspend the tax unilaterally. Any suspension would also divert revenue from the Highway Trust Fund, which generates more than $23 billion annually from the tax, the Associated Press reported.

Thune told reporters he is open to hearing from colleagues who support the measure despite his concerns about the Highway Trust Fund. "You know, I've got some colleagues out there who think it's a good idea. So, we'll hear them out," he said, according to the Associated Press. His skepticism centers on the potential impact to the fund, which the Associated Press reported is a major source of highway and public transit revenue.

Trump has indicated the tax should be restored once fuel prices fall. In his interview with CBS News, Trump said he would want the tax back "when gas goes down." The comment links the duration of any suspension to a future decline in fuel prices.