Yellen says a federal gas tax exemption is on the table to reduce record gas prices and inflation

Yellen says a federal gas tax exemption is on the table to reduce record gas prices and inflation
Yellen says a federal gas tax exemption is on the table to reduce record gas prices and inflation

A federal fuel tax exemption is ‘definitely priced in’ to reduce fuel costs, the Treasury Secretary said. Janet Yellen reported on ABC’s ‘This Week’ on Sunday morning.

Average fuel costs topped $5 a gallon last week for the first time ever and are down just $4.98 as of Sunday.

Asked by host George Stephanopoulos whether or not a fuel tax exemption was a possible short-term answer, Yellen replied, “President Biden wants to do something that he probably can do to help customers.” Gas prices have skyrocketed and it’s clearly weighing down households.

“He can work with Congress and that’s definitely a concept worth looking at,” he added.

Yellen again called inflation, with prices up 8.6% at the end of May, as “unacceptably high” but said she didn’t think a recession was “inevitable.”

An Exemption From The Federal Gasoline Tax To Lower Gasoline Prices Is 'Certainly Worth Considering', The Treasury Secretary.  Janet Yellen Told Abc'S 'This Week' On Sunday Morning.

A federal fuel tax exemption is ‘definitely priced in’ to reduce fuel costs, the Treasury Secretary said. Janet Yellen reported on ABC’s ‘This Week’ on Sunday morning.

Three-quarters of CEOs around the world expect a global recession in the next 12 to 18 months due to Russia’s brutal fighting in Ukraine, a Convention Board poll warned last week.

Federal President Jerome Powell has warned that the US economy will suffer much more damage before inflation drops from its highest level in 41 years.

The Federal Reserve on Wednesday raised interest rates by 0.75 percent, their biggest increase since 1994, in a bid to rein in inflation. Powell had warned last month that more hikes appear to be in the near future.

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‘Inflation has clearly shaken to the upside over the past year, and more retail surprises are possible. Therefore, we will have to be agile in responding to incoming information,’ he said.

‘We hope that the general public will see us as someone who will apparently succeed in reducing inflation to 2%. and that’s crucial,’ she noted. “It may take a while for inflation to come down again, however we are going to do this.”

Gas Prices In Harlem, New York Were $5.19 A Gallon Last Week

The price of gasoline in Harlem, New York, was $5.19 a gallon last week

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Biden has come under increasing pressure even from his own group to cut the federal fuel tax, 18.3 cents a gallon, as a way to cut costs.

However, Democratic Rep. Earl Blumenauer wrote a letter to President Biden this week warning him against taking that step, according to The Hill.

The Oregon legislator mentioned that doing so would create a “huge hole” within the infrastructure and transportation price range. Suspending the federal fuel tax for the rest of the fiscal year would leave the Highway Transportation fund $20 billion short, according to the budget model from the University of Pennsylvania’s Wharton College of Enterprise.

Power Sec Jennifer Granholm expressed her doubts about the suspension of the fuel tax on CNN on Sunday. ‘Part of the problem with the fuel tax, after all, is that it finances roads. And we just made a huge infrastructure bill to help finance the roads.’

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Some states, including Maryland, Georgia and New York, have already moved to lower their fuel tax. Some suggest that Biden asking other states to do the same would be an efficient move by the White House to help ease the pressure on citizens’ pockets.

Biden’s finance team has mentioned a fuel tax exemption and is expected to meet with more talks on the issue later this week.

Biden has already tapped into the Strategic Petroleum Reserves, which had a negligible impact on fuel costs. Last week, he wrote a follow-up letter to the CEOs of the nation’s top gasoline companies threatening to tap their “emergency power” if they don’t take steps to cut costs.

In a letter to Exxon obtained by Axios, Biden wrote that the distinction “of more than 15% at the pump is a result of traditionally high revenue margins for refining oil into gasoline, diesel and other refined products.”

“Since the beginning of the year, refinery margins for refining gasoline and diesel have tripled and are now at their highest levels ever recorded,” Exxon Mobil CEO Darren Woods added in the letter.

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“Instruments of the authorities and emergency authorities to expand the capacity and production of the refinery in the short term, and to ensure that each area of ​​this country is properly equipped,” he wrote. “I have already invoked emergency powers to execute the largest launch of the Strategic Petroleum Reserve in history, increase access to E15 (gasoline with 15% ethanol), and authorize the use of the Protective Manufacturing Act to supply reliable inputs in energy production. ‘

“I am ready to make use of all the instruments at my disposal, as possible, to manage the limits and offer people a safe and affordable energy supply,” he added.

While the White House has repeatedly said it is open to ideas on how to ease rising taxes, Biden’s Commerce Secretary Gina Raimondo took a more defeatist angle last week when she said there wasn’t much the administration could do to help.

“Sadly, that’s the brutal reality,” Raimondo told CNN when asked what Biden can do.

“That is largely attributable to Putin’s aggression,” Raimondo added. “You realize, since Putin moved troops to the Ukraine border, fuel costs have gone up over $1.40 a gallon, and the president is asking Congress and other potential concepts.”

“But as you say, the truth is that there is not much more to do,” he said.