During an appearance on Newsmax TV’s “The Record with Greta Van Susteren” on Tuesday, former Obama adviser Austan Goolsbee stated that the federal gas tax holiday that President Joe Biden is considering may not have the effect that Biden believes it will.
Goolsbee, an economics professor at the University of Chicago Booth School of Business and former Chairman of the Council of Economic Advisers under former President Barack Obama, claimed that the Highway Trust Fund — a major source of federal funding for highways, roads and bridges which is funded partially by the federal gas tax — would now have to borrow money to make up for the loss of revenue from the gas tax holiday.
“I think the money that would go to the federal Highway Trust Fund, they would just have to borrow it,” Goolsbee said.
He went on to note that, because the U.S. is currently in a situation where the oil supply is constrained, “it might very well be that the refineries simply raise the price” and “the consumers’ actual benefit might be even smaller than what it first looks like.”
“I think the bigger problem that people should think about is in an environment where the supply is constrained, when you get rid of the tax — if you got rid of the tax, it might very well be that the refineries simply raise the price and they say, hey, thank you very much,” Goolsbee said. “You, basically, rather than cutting the tax and getting it passed through to the consumers, did a thing that got passed through to the refineries. So, the consumers’ actual benefit might be even smaller than what it first looks like.”
Regardless of what the effects of the gas tax holiday will be short-term, it still will not solve the long-term problem. The Biden administration is once again proposing a temporary fix, as gas prices will still continue to rise due to bad policies, and as soon as the gas tax holiday is over, prices will go back up even higher. The American people need actual permanent solutions to the economic hardships they are currently facing.