Yellen says a federal gas tax holiday is on the table

A federal gas tax holiday is ‘certainly worth considering’ to lower gas prices, Treasury Sec. Janet Yellen told ABC’s ‘This Week’ on Sunday morning. 

Average gas prices breached $5 per gallon last week for the first time ever last and have dipped slightly to $4.98 as of Sunday. 

Asked by host George Stephanopoulos whether a gas tax holiday was a potential short-term solution, Yellen replied: ‘President Biden wants to do anything he possibly can to help consumers. Gas prices have risen a great deal and it’s clearly burdening households.’ 

‘He stands ready to work with Congress and that’s an idea that certainly worth considering,’ she added. 

Yellen again said that inflation, with prices up 8.6 percent this May over last, is ‘unacceptably high’ but said that she did not believe a recession was ‘inevitable.’ 

Three quarters of CEOs across the globe are expecting a global recession within the next 12 to 18 months due to Russia’s brutal war in Ukraine, a Conference Board survey warned last week. 

Federal Chair Jerome Powell has warned the American economy will see even more damage before inflation comes down from its 41-year-high. 

The Federal Reserve on Wednesday raised interest rates by 0.75 per cent – their biggest increase since 1994 – in an attempt to rein in inflation. Powell had warned last month that more hikes are likely in the near future.

‘Inflation has obviously surprised to the upside over the past year, and further surprises could be in store. We therefore will need to be nimble in responding to incoming data,’ he said.

‘We think that the public generally sees us as as very likely to be successful in getting inflation down to 2 percent. and that’s critical,’ he noted. ‘It will take some time to get inflation back down but we will do that.’

Biden has come under increasing pressure even among his own party to suspend the federal gas tax, 18.3 cents a gallon, as a way to drive down prices.  

But Democratic Rep. Earl Blumenauer wrote a letter to President Biden this week warning him against taking such a step, according to  

The Oregon lawmaker said that doing so would create a ‘massive gap’ in the infrastructure and transportation budget. Suspending the federal gas tax through the rest of the fiscal year would leave the Highway Transportation fund $20 billion short, according to budget modeling from the University of Pennsylvania’s Wharton School of Business.

Energy Sec. Jennifer Granholm expressed hesitancy about suspending the gas tax on CNN Sunday. ‘Part of the challenge with the gas tax, of course, is that it funds the roads. And we just did a big infrastructure bill to help fund the roads.’ 

Some states, including Maryland, Georgia and New York, have already moved to suspend their gas tax. Some suggest that Biden calling on the other states to do the same would also be an <a href="https://www.bing.com/search?q=effective&form=MSNNWS&mkt=en-us&pq=effe