Biden considers gas tax holiday as national prices top $4.50 a gallon

At a national average of $4.522 a gallon, suspending the 18.4-cent federal gasoline tax would knock the price to about $4.34, a reduction of just 4.1%. The federal diesel tax is 24.4 cents a gallon, and the gap between the relief at the pump and the cost to the public ledger is the central problem.

That 18.4-cent levy has been frozen since 1993, but it remains a core source of transportation money. In 2022, motor-fuel excise taxes supplied 83% of the Highway Trust Fund’s revenue, according to the Congressional Budget Office, financing federal highway and transit programs. Because of that reliance, a temporary suspension would likely require Congress to act, not just the White House, and the fund is already constrained by law that assumes its obligations will be paid in full.

The idea is not new. On June 22, 2022, President Joe Biden asked Congress to suspend the federal gas and diesel taxes for three months, from July through September, when national gasoline prices were around $5 a gallon. The proposal drew immediate skepticism from analysts who said prices would not fall one-for-one and that any lost revenue would squeeze road funding. The Bipartisan Policy Center has said the federal government has never suspended the gas tax before, and the American Trucking Associations called the 2022 idea a “gimmick,” arguing it would undermine road-and-bridge funding.

The issue has returned as prices climbed above $4.50 nationally in early May, the highest level since July 2022. AAA put the U.S. average for regular gasoline at $4.522 on May 10, 2026, as rising U.S.-Iran tensions and worries about global oil supply pushed fuel costs higher. On the same day, Energy Secretary Chris Wright told NBC News’ Meet the Press that the Trump administration was “open to all ideas” to lower gas prices and would support “all measures” that could help, while adding that “everything has trade-offs.”

Those trade-offs are large. The Committee for a Responsible Federal Budget has estimated that a federal gas-tax holiday lasting from March through December would cut Highway Trust Fund revenue by $20 billion, accelerating the fund’s insolvency. Sen. Mark Kelly has already introduced a bill that would suspend the 18.4-cent tax through October 1, 2026. For Washington, the arithmetic is clear: a holiday offers modest relief at the pump, but it also shifts the bill to the highways, bridges and transit systems that the tax was built to pay for.