House Avoids Last-Minute Attempt to Suspend Gas Tax
House Republican leaders considered bringing a bill suspending federal motor fuel taxes up for a last-minute vote this week but decided not to after a dramatic late-night leadership meeting featuring some yelling.
Instead, the House has adjourned until November without taking any action on fuel taxes or the underlying problem of fuel prices.
Background: Per AAA, the national average retail price of regular unleaded gasoline is $4.44 per gallon as of September 17, up 16 c.p.g. in one week. And the national average price of highway diesel fuel is $6.40 per gallon, up an astounding 42 c.p.g. in just one week.
(It’s the diesel price that really has economists worried. Not only is the price of diesel fuel baked into the retail price of anything that is transported by truck or rail or barge, and not only is it baked into the price of everything that is built or created using heavy equipment, but the price of diesel always goes up every winter, significantly, because 4.8 million U.S. homes burn diesel fuel (a.k.a. home heating oil) in the winter to keep from freezing.)
Differing state fuel tax rates, and regional discrepancies in refinery and pipeline capacity, lead to significant differences in state-to-state retail prices. As of yesterday, Texas had the lowest regular gas price ($3.94/gallon), contrasted with California at $6.09/gallon. And for diesel, Oklahoma was $5.94/gallon while the diesel price in California was – wait for it – $8.35 per gallon, up $3.18/gallon from one year ago.
The high price of fuel is the general background. The advances made by Iran-aligned Houthi rebels in southern Yemen to cut a Saudi pipeline and also gain strategic ground overlooking the straits leading into the Red Sea to the Suez Canal last week made it clear that global petroleum supply restrictions won’t be improving before the midterm elections. And House Speaker Johnson’s decision last week to cut short the September session short and cancel House sessions scheduled for the September 22-October 1 period meant that this week was the last possible opportunity for a pre-election messaging vote on fuel prices.
Cut to: Tuesday, September 15, mid-day: the weekly vote on a special rule from the House Rules Committee that would allow the House to bring up several unrelated bills later in the week and pass them by simple majority votes. In recent years, all (or at least 99 percent) of the minority votes “no” on these special rule votes on general principle, meaning that just three or four GOP “no” votes can paralyze the House agenda for a week.
This means that the rule votes are when House Republicans have an opportunity to threaten the weekly agenda if the Speaker and Majority Leader don’t mee their requests for something else unrelated. Usually, this is whatever Freedom Caucus members are mad about this week.
On Tuesday, it was the demand of a few Freedom Caucus members for a vote on relief from gas prices before the elections (which meant almost immediately). Freedom Caucus chairman Andy Harris (R-MD) quickly introduced a bill (H.R. 10392) to suspend federal taxes on gasoline (currently 18.4 c.p.g.) and diesel fuel (currently 24.4 c.p.g.) through December 31, 2026.
As we noted in a May 15 article, several other legislators, from both parties, have introduced motor fuel tax holiday proposals in the 119th Congress. But all of those previous bills contained provisions that would hold the Highway Trust Fund harmless from the loss of revenue to the Trust Fund that would be caused by suspending collection of the Trust Fund’s major source of income.
Harris’s bill introduced on Tuesday did not contain any such hold harmless provision, which means that it would cost the Trust Fund somewhere in the $11 billion to $15 billion range depending on date of enactment. This would accelerate the impending insolvency of the Mass Transit Account of the Highway Trust Fund from late in fiscal 2027 to some point earlier in fiscal 2027.
During the electronic vote on the special rule, a few Freedom Caucus members held back for long enough that the Speaker promised them a quick leadership meeting on whether or not to bring Harris’s fuel tax holiday bill to the floor later that week. The meeting took place in the Capitol late Tuesday night (Sept. 15), with elected party leaders, the heads of the “five families” (Freedom Caucus and four other ideological groupings within the House Republican Caucus), plus House Transportation and Infrastructure Committee chairman Sam Graves (R-MO).
As to precisely what happened in the late-night meeting, you really need to read Reese Gorman’s blow-by-blow in the Washington Sun for the crazy-seeming details, but everyone agrees that Graves came to the meeting armed with a printout of a tweet that Harris made in 2022 stating that “Suspending the federal gas tax is just another Biden Administration stunt to distract from their self-inflicted crisis.”
Harris and his Freedom Caucus colleagues did not like this and stormed out of the room yelling. The decision was apparently then made not to proceed with a gas tax holiday bill before the elections.
The following morning, Harris’s Freedom Caucus colleague Clay Higgins (R-LA) issued a social media post saying that “Establishment elitist Sam Graves…killed the Freedom Caucus bill that would have canceled the federal fuel tax for 3 months…And he was rude about it. Unbelievable.”
The Speaker wound up sending the House home a day early so as to avoid making his members vote on a motion to impeach Defense Secretary Pete Hegseth, so there is now no way for a fuel tax holiday bill to get a House vote before the elections.
But this incident proves several things:
- As demonstrated by Harris’s bill’s lack of a Trust Fund hold harmless clause, these Freedom Caucus folks, and perhaps other Members of Congress, either (a) do not understand or (b) do not care that the current motor fuels taxes do not support general revenues but instead go directly towards paying the bills incurred by existing highway and mass transit spending programs already authorized by Congress. If it’s (a), education is possible, but if it’s (b), there’s not much to be done.
- Maybe things will change after the elections, but that leadership meeting on the 15th did not sound like a House Republican Conference that will have its act together enough to bring a surface transportation reauthorization bill to the House floor during the lame-duck session.
- The current level of motor fuel prices is so unpopular with the public that, no matter how you dress any kind of tax or fee to get more money out of the act of motoring, that increase in the cost of driving is going to be extremely difficult to sell to the public.
