U.S. President Joe Biden stands with former President Barack Obama during an event on the Affordable Care Act, the former president’s top legislative accomplishment, in the East Room at the White House in Washington, U.S., April 5, 2022.
Leah Millis | Reuters
Former President Barack Obama called opposing a federal gas tax holiday “one of our prouder moments” during his 2008 campaign — but his vice president, Joe Biden, thinks that kind of holiday is much needed now that he’s in charge at the White House.
President Biden’s desire for a three-month reprieve for customers from federal and gasoline taxes comes as the U.S. sees soaring fuel prices, and the Democrat sees plummeting public approval ratings less than four months away from the mid-term elections.
Whether Congress goes for Biden’s pitch, and whether he sees positive response from the electorate to it remains to be seen.
But his former boss Obama, in his 2020 best-selling memoir “A Promised Land,” touted the political benefits of opposing short-term financial relief for American drivers on the grounds it would lead to longer-term financial harm.
In fact, Obama noted that his lock on the Democratic presidential nomination came on the heels of that decision in spring 2008.
At the time, Obama was locked in a primary battle with former New York senator Hillary Clinton, and as he was under fire as a result of controversial sermons by his pastor, Jeremiah Wright.
“Then we got some help from an unexpected quarter,” Obama wrote.
“Gas prices had been skyrocketing,” and “nothing got voters in a bad mood like high gas prices,” he wrote.
The eventual Republican presidential nominee that year, Sen. John McCain of Arizona, proposed a temporary suspension of the federal gas tax — just as Biden now is doing — and “Hillary immediately endorsed the idea,” Obama wrote.
When Obama’s campaign team asked him what he wanted to say on the issue, “I told them I was against it,” he wrote.
“While it had some superficial appeal, I knew it would drain an already depleted federal highway fund, leading to fewer infrastructure projects and jobs,” Obama wrote.
“Based on my experience as an Illinois state senator, where I’d once voted for a similar proposal, I was sure that consumers wouldn’t see much benefit. In fact, gas station owners were just as likely to keep gas prices high and boost their own profits as they were to pass the three-cents-a-gallon savings on to motorists.”
Obama wrote that “somewhat to my surprise,” his top campaign advisors agreed with him. And the following day, outside a gas station, he made his argument to reporters for his position, calling it a “serious long-term energy policy” that contrasted “with the typical Washington solution that both McCain and Hillary were proposing,” he wrote.
Obama then wrote that he “doubled down” on his argument after McCain and Clinton both tried to portray him as unconcerned about the finances of working families, “shooting a TV ad on the issue, and running it nonstop throughout Indiana and North Carolina.”
“The easiest thing in the world for a politician to do is tell you exactly what you want to hear,” Obama said at the time, calling the gas tax holiday a “gimmick.”
“It was one our prouder moments, taking a tough position without the benefit of polls and in the face of pundits who thought we were crazy,” Obama wrote in his memoir.
“We began seeing signs in the polling data that voters were buying our argument,” he wrote.
Soon afterward, Obama defeated Clinton in North Carolina’s primary by 14 percentage points, and, “more surprisingly, we had pulled out an effective tie in Indiana, losing by just a few thousand votes,” Obama wrote.
While there would be a half-dozen more primaries before the official end of the Democratic contest, “The results that night told us that the race was basically over,” he wrote.
“I would be the Democratic nominee for president of the United States,” he wrote.
More recently, another top Democrat, House Speaker Nancy Pelosi of California, has repeatedly criticized the idea of a federal gas tax holiday.
In April, Pelosi called the holiday idea “good PR,” but added, “There’s no guarantee that the saving, the reduction in the federal tax, that would be passed on to the consumer.”
A month earlier, Pelosi call the idea “very showbiz.”
Biden, who is set to talk about his proposal for a federal gas tax holiday on Wednesday afternoon, will ask states to suspend their own gas taxes.
There currently is an 18.4 cents-per-gallon federal tax on gasoline, and a 24.4 cents-per-gallon federal tax on diesel fuel.
(With inputs from CNBC)