Senate leader declares Biden’s gas tax holiday 'gimmick' 'dead on arrival'

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White House ramps up attacks on oil companies

White House economic adviser Gene Sperling joins 'The Story' to react to critics claiming Biden energy policy moreso to blame for rapidly inflating prices.

Sen. John Thune, the second-ranking Republican in the Senate, said Wednesday that President Biden’s request that Congress pass a three-month suspension of the federal gasoline tax, "is dead on arrival." 

"What the administration, of course, is coming up with is yet another gimmick, another Band-Aid and something they know is dead on arrival up here in Congress," Thune, who sits on three key Senate committees, said. 

FILE: U.S. Senator John Thune (R-SD) listens during a Senate Commerce, Science, and Transportation Committee hearing on President Biden's proposed budget request for the Department of Transportation, on Capitol Hill in Washington, U.S., May 3, 2022.  (REUTERS/Michael A. McCoy)

Thune’s comments came after the president called on Congress to suspend federal gasoline and diesel taxes for three months to ease financial pressures. Biden also called on states to suspend their own gas taxes or provide similar relief.  

"It doesn't reduce all the pain but it will be a big help," Biden said, using the bully pulpit when his administration believes it has run out of direct levers to address soaring gas prices. "I'm doing my part. I want Congress, states and industry to do their part as well."

FEDERAL GAS TAX HOLIDAY: HERE'S HOW MUCH AMERICAN DRIVERS WILL ACTUALLY SAVE

At issue is the 18.4 cents-a-gallon federal tax on gas and the 24.4 cents-a-gallon federal tax on diesel fuel. If the gas savings were fully passed along to consumers, people would save roughly 3.6% at the pump when prices are averaging about $5 a gallon nationwide.

Biden's push faces uphill odds in Congress, which must act in order to suspend the tax, and where many lawmakers, including some in his own party, have expressed reservations. Even many economists view the idea of a gas tax holiday with skepticism.

Administration officials said the $10 billion cost of the gas tax holiday would be paid for and the Highway Trust Fund kept whole, even though the gas taxes make up a substantial source of revenue for the fund. The officials did not specify any new revenue sources.

President Joe Biden speaks about gas prices in the South Court Auditorium on the White House campus, Wednesday, June 22, 2022, in Washington. (AP Photo/Evan Vucci)

The president has also called on energy companies to accept lower profit margins to increase oil production and refining capacity for gasoline.

This has increased tensions with oil producers: Biden has judged the companies to be making "more money than God." That kicked off a chain of events in which the head of Chevron, Michael Wirth, sent a letter to the White House saying that the administration "has largely sought to criticize, and at times vilify, our industry."

Asked about the letter, Biden said of Wirth: "He's mildly sensitive. I didn't know they'd get their feelings hurt that quickly."

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Energy companies are scheduled to meet Thursday with Energy Secretary Jennifer Granholm to discuss ways to increase supply.

The Associated Press contributed to this report.