Opposition to President Donald Trump‘s plan for a gas tax holiday to ease cost-of-living concerns is coming not just from his political foes, but also from the Republican-leaning trucking and construction sectors.
Those industries rely heavily on the road and transportation infrastructure projects funded by the federal gas and diesel taxes.
“A gas tax holiday is a good way to blow a hole in the collection of revenue for funding highway and transit repairs, but it’s a bad way to help drivers who are affected by higher gas prices,” said Brian Turmail, national spokesman for the Associated General Contractors of America, a construction industry trade group.
Gas prices are up about 50% since the Iran war began on Feb. 28, clocking in at $4.50 a gallon on Tuesday, according to AAA. Diesel, used in trucks and construction equipment, is higher at $5.64 a gallon. Iran has largely blocked the Strait of Hormuz, through which a fifth of the world’s oil normally travels.
Trump on Monday floated the idea of a gas tax holiday, though any such move would require action from Congress, which has sole authority over federal taxation. Republican lawmakers followed Trump’s proposal by introducing legislation that would allow a pause on the 18.4-cent per gallon federal gas tax and the 24.4-cent diesel tax.
The federal gas tax primarily funds the Highway Trust Fund, money from which is used on federal highway construction, maintenance, public transit and infrastructure projects. That money is vital to certain industries, including trucking and construction, that either rely on federal roads or are contracted to complete infrastructure projects.
Opponents of gas tax holidays — including a trio of trucking groups that spoke out against the proposal on Monday — argue that consumers end up saving little since the pause is implemented at the wholesale level. Instead of offering relief, a pause could deplete the Highway Trust Fund.
“Without replacement funds, fuel tax revenues supporting critical investments in highway safety and infrastructure projects would evaporate, hindering the safe and efficient movement of people and goods across the country,” the American Trucking Associations, Truckload Carriers Association and National Tank Truck Carriers wrote.
Some congressional Democrats have offered similar arguments, claiming a gas tax holiday would be a drop in the bucket for consumers and that the only real way to bring down gas prices is to end the war in Iran.
“Eighteen cents of gas tax relief a gallon doesn’t even come close to the $1.50 gas price increase from this war, and Republicans need to stop pretending that it does,” Senate Minority Leader Chuck Schumer, D-N.Y., said from the Senate floor Tuesday. “Offering Americans literal pennies on the dollar to cope with skyrocketing gas prices just won’t cut it — 18 cents is not $1.50.”
Budget hawks could also complicate Trump’s gas tax break plan. And the national debt is back in the news after surpassing 100% of GDP earlier in May.
Even a short-term gas tax pause could be costly. The Committee for a Responsible Federal Budget projected in March that a three-month holiday without adding a different federal revenue source could add $10.5 billion to the deficit.
In Congress, the gas tax issue doesn’t break cleanly along partisan lines.
Some Republicans rushed to support Trump’s proposal. Rep. Anna Paulina Luna, R-Fla., said on Monday she would introduce legislation to suspend the federal gas tax, though she did not provide details. And Sen. Josh Hawley, R-Mo., introduced a biil that would halt the gas tax for at least 90 days.
And a handful of Democrats have been open to the idea.
James Talarico, a member of the Texas state House and a Democratic candidate for Senate, last month called for a pause on the federal gas tax. And House Budget Committee ranking member Rep. Brendan Boyle, D-Penn., introduced legislation this year that would suspend the federal gas tax whenever the national average exceeds $4 per gallon.
But even some Republicans seemed skeptical.
“The gas tax of course pays for highways and bridges, and so if you suspend it, it means you don’t have the money doing into the highway trust fund. But as a temporary measure, I could live with it,” Sen. John Cornyn, R-Texas, said on Tuesday.
Sen. John Hoeven, R-N.D., similarly said he could live with a gas tax holiday on a temporary basis, but is more focused on opening the Strait of Hormuz. “Because that’s what’s going to bring gas prices down the fastest and in the most significant way,” Hoeven said.
Senate Majority Leader John Thune, R-S.D., told reporters Tuesday that he’d been opposed to past attempts at halting the federal gas tax, like when President Joe Biden proposed a similar measure in 2022 when prices spiked following Russia’s invasion of Ukraine.
“If you lifted that, does that ultimately get passed on to consumer, to the customer, buyer out there, or does it get sucked up in the supply chain somewhere?” Thune said. “I think those are all fair questions to ask, but it’s a conversation that I think we’re willing to have, and I’m certainly willing to hear the president’s arguments.
— Emily Wilkins and Karen Sloan contributed to this story.
