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What is a federal gas tax holiday?

(NEXSTAR) – President Biden hopes to make a final decision on whether to support a federal gas tax holiday in the coming days as high prices at the pump put pressure on Americans already facing some of the worst inflation in decades. The holiday could save motorists nearly 20 cents per gallon of gasoline.

The current federal gas tax is about 18.4 cents, according to the U.S. Energy Information Administration. The tax itself is imposed on those producing the gasoline, which then impacts the prices we pay at the pump.

Simply put, a federal gas tax holiday would temporarily suspend the 18.4-cent gas tax. It doesn’t, however, mean you’ll pay 18.4 cents less per gallon of gas at the pump.

Earlier this year, the Penn Wharton Budget Model estimated that suspending the federal gas tax from March to December would cut the average per-capita gasoline spending by between just $16 and $47. The savings could be even smaller if oil and gas companies – from whom the gas tax is collected – don’t pass the tax savings on to consumers.

Two lawmakers, Sens. Maggie Hassan (D-N.H.) and Mark Kelly (D-Ariz.), introduced legislation in February to suspend the federal gas tax until next year. U.S. Treasury Secretary Janet Yellen recently called it “an idea that’s certainly worth considering.”

The legislation by Hassan and Kelly calls for any price relief to be passed on to consumers instead of oil and gas companies, CNBC reports. Gas tax holidays in Connecticut, Georgia, and Maryland did help consumers save at the pump, a new report from the Penn Wharton Budget Model found. In these states, the majority of the savings went to consumers, instead of service stations and others in the energy sector.

A federal gas tax holiday could mean some relief for motorists, but it could negatively impact the country’s infrastructure. The tax revenue is used to help pay for U.S. highways. Without the federal gas tax, nearly $15 billion in tax revenue would be lost, according to Kiplinger, a business and finance news site.

Temporarily suspending the gas tax is one of the few tools the federal government has to cut gas prices, Kiplinger explains. Other options include tapping the Strategic Petroleum Reserve, encouraging oil production, and allowing more ethanol in gasoline.

The Biden administration has already released oil from the U.S. strategic reserve and increased ethanol blending for the summer, in addition to sending a letter last week to oil refiners urging them to increase their refining capacity. Yet those efforts have yet to reduce price pressures meaningfully.

Congressional action is necessary to suspend the federal gas tax. In March, Speaker Nancy Pelosi (D-Calif.) rejected the idea of suspending the federal gas tax, saying it wouldn’t help consumers much because oil companies wouldn’t be required to pass on the savings.

States also have their own gas tax and, in all but Alaska, that rate is higher than the federal gas tax. Some states are still considering gas tax breaks, while others have already approved some sort of local pump relief.

Californians, for example, are awaiting gas rebate checks. New Yorkers saw their prices dip at the start of June when the state cut its gas tax by roughly 16 cents.

The Hill’s Brett Samuels and the Associated Press contributed to this report.

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Musk 'undecided' on potential Trump 2024 campaign

Elon Musk said in an interview on Tuesday that he is “undecided” about a possible 2024 reelection bid by former President Trump – comments that come after the Tesla executive said that he was leaning toward Florida Gov. Ron DeSantis (R).

“I think I’m undecided at this point about that election,” Musk said in an interview at Qatar Economic Forum with Bloomberg News Editor-in-Chief John Micklethwait when asked if he would support Trump in the next presidential election, according to the news outlet.

Musk previously revealed that he supported Democratic candidates in the past, saying in late May that he contributed to Hillary Clinton’s 2016 campaign and voted for her in addition to voting for President Biden in 2020.

“However, given unprovoked attacks by leading Democrats against me & a very cold shoulder to Tesla & SpaceX, I intend to vote Republican in November,” he tweeted at the time.

Earlier this month, he said he voted for Republican candidate Mayra Flores in a special election for a Texas House seat.

He said it was the first time he had voted for the Republican Party’s candidate and predicted a “massive red wave in 2022.”

Asked at the time if he would vote Republican in the 2024 presidential election, he replied to a Twitter user “tbd.” He also replied “DeSantis” when asked who he was leaning toward.

Neither Trump nor DeSantis have announced that they are running in 2024, though Trump has teased the possibility and the Florida governor is widely considered a potential contender. 

Though Musk, who has offered to buy Twitter, said he is undecided about a Trump 2024 bid, he has previously been sympathetic to the former president for being kicked off the social media platform in the wake of the Jan. 6, 2021 Capitol rioting, calling it a “morally bad decision, to be clear, and foolish in the extreme.”

“I do think it was not correct to ban Donald Trump. I think that was a mistake,” he said in May during the Financial Times’s “Future of the Car” event. “It alienated a large part of the country and did not ultimately result in Donald Trump not having a voice.”

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Chivalry is not dead: US Soccer’s unfair labor agreement

In a landmark agreement, members of the U.S. men’s national soccer team have agreed to pool their World Cup prize money with the women’s team. Call it solidarity, call it charity, but please don’t call it equality. 

Men should keep earning more than women from their World Cup participation because the men’s tournament generates much more profit. The situation is not unique to the World Cup, but applies to national soccer leagues, basketball and most other professional sports.  

Men’s sports generate more money because people are typically more interested in watching men compete. There are some sports, such as figure skating and gymnastics, where women athletes tend to attract more interest. That is the reason why many of the highest-earning professional figure skaters are women. But the NBA is about 50 times more popular than the WNBA, and there are no women’s pro leagues in the other major spectator sports in America — football, baseball and ice hockey.    

Why are people more interested in watching men compete? I suspect it has something to do with the fact that male athletes are generally superior to women in most athletic pursuits.

Years ago, when tennis super stars Serena and Venus Williams played a low-ranking male tennis player on a practice court at the Australian Open, the man beat them both handily. When the U.S. women’s soccer team played against a team of teenage boys in 2017, the women’s team lost. Why were they even scrimmaging against 14-year-old boys in preparation for the World Cup? Presumably, the boys’ team from Dallas was considered a decent approximation of their international competition.

Biological differences in strength, speed and stamina are the reason most sports are segregated by sex. If women were competitive against men, women would not be demanding more money, they would be demanding the end of segregation. Professional baseball used to be segregated by race; Black players were excluded from Major League Baseball (MLB) until about 75 years ago, preventing them from earning their fair share of the revenue generated by “America’s pastime.” This was a clear and grotesque example of inequality. In response, Black athletes did not ask the MLB players to share their profits with the Negro leagues; they demanded equal access to the MLB. That was a fair solution to systemic discrimination.       

I hail from Finland, a country that is frequently considered one of the most gender-equal in the world. In 2019, the Finnish ombudsman for equality concluded that the Finnish national soccer association did not discriminate against women by compensating men at a much higher rate. The decision was informed by the observation that only the men’s national team generated profit. Some of this profit was used to sponsor the women’s team, which was found to be losing money for the organization. Apparently, Finnish society remains open to the theory that merit justifies unequal outcomes.     

Although the path-breaking labor agreement within U.S. Soccer has been greeted as a sign of progress, it sends exactly the wrong message to the women and girls of America: If you can’t compete with men – if you are unable to perform at the same level – you can always count on the chivalry of men.  

Whatever the men end up earning from playing for the national team is only a fraction of what they make as professional athletes in Major League Soccer and the European leagues. At least for now, that source of their income is based on market forces rather than the court of public opinion. I suspect that is the main reason the men agreed, however begrudgingly, to sign this contract. They just want this thing to go away already. 

Jukka Savolainen is a Heterodox Academy writing fellow and a sociology professor at Wayne State University, where he teaches sociology of sport.  

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Zelensky: Russia 'very nervous' ahead of European Union membership decision

Ukrainian President Volodymyr Zelensky said early Tuesday that Russia is “very nervous” just before a decision on his country’s membership in the European Union (EU).

“As I predicted, Russia is very nervous about our activity,” he said during a virtual address. “Again shelling of Kharkiv, Odesa, again attempts of brutal offensive actions in Donbas. This is an evil that can only be appeased on the battlefield.”

The Ukrainian president said Ukraine is going through a “crucial week” ahead of the EU’s decision, which is expected in a few days.

“We prove every day that we are already part of a united [Europe],” the Ukrainian president said.

Zelensky on Monday met with Ben Stiller, who visited as a global goodwill ambassador to the United Nations High Commission for Refugees.

He also met with leaders of the African Union to discuss the supply of agricultural products “in the amount that will definitely guarantee the security of Africa, the security of Asia.”

“In general, we are expanding the capabilities of our state,” Zelensky said. “Like all powerful European countries, we need our own policies towards Africa, Latin America, South-East Asia and other parts of the world that were previously left out of proper attention of Ukraine’s foreign policy.”

Zelensky added that an agreement to increase the capacity of the Krakovets’-Korczowa checkpoint will “significantly” boost the flow of exports and imports across the border with Poland.

The Ukrainian president on Monday also spoke to the International Festival of Creativity in Cannes in France, which he said allowed the country to help capture the attention Ukraine needs.

“The longer the war lasts, the harder it is to compete for the attention of hundreds of millions of people in different countries,” he said. “But I will do everything possible so that attention to Ukraine does not fade.”

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Putin spokesman: Brittney Griner is not a 'hostage'

A spokesperson for Russian President Vladimir Putin pushed back on the U.S. State Department’s position that WBNA star Brittney Griner is being wrongfully detained in Russia, saying an interview on Monday that “she violated Russian law, and now she’s being prosecuted.”

“It’s not about being a hostage. There are lots of American citizens here. They’re enjoying their freedoms … but you have to obey the laws,” Dmitry Peskov told NBC News senior international correspondent Keir Simmons in an exclusive interview.

Peskov did not provide any indication on when Russian officials would release Griner, who has been detained in since February after authorities allegedly found hashish oil in her luggage.

In his interview with NBC News, Peskov claimed her case did not differ from “hundreds and hundreds of Russian citizens that were sentenced for carrying hashish” and asked why officials should make an exception for the American basketball star.

Peskov said he could not speak about the decision of Russian law enforcement when he was asked why she had not just been directed back home or refused entry.

The Biden administration declared last month that Griner was being wrongfully detained in Russia. Her detention has been extended several times, the latest of which is through early July.

State Department officials briefed members of Griner’s WNBA team, the Phoenix Mercury, earlier this month on developments in her case. 

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How to understand Russia and the war

Navigating the debates on Russia’s war in Ukraine can be confusing for the uninitiated. In fact, the differences are largely due to different assumptions regarding politics in general and Russian politics in particular. The assumptions matter, because they inspire policies. They also matter because some assumptions are more plausible than others.

To what do you ascribe the greatest explanatory value? To a) policymakers, their policies and their rhetoric? To b) the institutions in which policymakers, policies and rhetoric are embedded? Or c) to the still larger systems and cultures underlying all of the above?

If you opt for a), you’re likely to believe that Western policies and rhetoric had a decisive effect on post-Soviet Russia’s evolution. In particular, the decision to enlarge NATO — and possibly to have broken promises to the Russians not to do so — appears critically important in explaining Russian animus toward the West and its allies, such as Ukraine.

The strong point of this kind of analysis is that bad policies and bad rhetoric may be undone. Ending the war, therefore, can be achieved by means of negotiation and compromise, as many in the West suggest. The problem is that ascribing so much explanatory weight to policy and rhetoric ignores history, ideology and culture, and presupposes that Russian leaders are exceptionally sensitive human beings who start or end wars because of real or imagined slights. Given what we know about Russian elites, they appear to be the exact opposite: They’re tough, unsentimental and vicious. If so, then hoping to end the war by means of good-faith negotiations is doomed to failure.

If you opt for c), you’re likely to believe that Russian policies and rhetoric — and, of course, the decision to go to war and commit genocide in Ukraine — are the product of deep-seated political, social and cultural structures that have molded Russian society for hundreds of years. To its credit, this kind of analysis, which is usually favored by historians, takes into consideration Russian history and culture, and thus is grounded in Russian reality.

But that same strength is also this approach’s weakness. For one thing, structures appear to deprive Russians and Westerners of agency, dooming them to a repetition of historically codified forms of thinking and acting. Thus, many in this camp argue that it wasn’t Vladimir Putin who created the system, but that the system and culture created Putin — just as they created a whole string of dictators throughout Russian history. If culture is ultimately responsible for the choices Putin and his cronies have made, there is little to be done about Russia. It is not and will not be democratic, rational and enlightened in any way that the West would recognize. Peace is, therefore, impossible. The best one can hope for is a cold war and an impenetrable iron curtain surrounding the malignant Russian state.

I’ve left option b) for last, because it strikes me as most persuasive, possibly because it avoids the extremes of ignoring history and culture altogether or giving them sole responsibility for Russia’s behavior. According to the logic of this middle option, history and culture have molded the institutions, policies and discourses found in Russia, but elites — and especially powerful authoritarian, totalitarian and fascist elites — have the capacity to tailor institutions to their aspirations and needs. Russian leaders aren’t shy wallflowers who take umbrage at any scowl or frown, but neither are they puppets of large historical forces. Instead, they shape political, social, economic and cultural institutions — just as those institutions constrain, but do not predetermine, their policy choices and rhetoric.

Seen in this light, a change in rhetoric won’t lead to peace; nor is peace impossible because “that’s the way Russia is.” Instead, the war is the product of Putin’s choices on the one hand, and of the fascist system he built that requires imperial expansion for its legitimacy on the other. Peace is possible, though not easy to achieve. It will require Putin’s physical or political departure and the replacement of fascism with some form of “run-of-the-mill” authoritarianism or decrepit democracy. Merely flattering Putin, or doing everything possible not to insult or annoy him, is pointless, just as it’s equally pointless to assume that fascism can never be dismantled and that tyrants cannot fall.

The final advantage of this middle option is that it places Ukraine — wherein the war is taking place, after all — into the center of things. Creating peace isn’t just a matter of waiting for the demise of Putin and his system; instead, peace can be achieved only if Ukraine wins the war. Only a humiliating victory can hasten Putin’s departure and create fissures that could destroy Russian fascism. And, better still, a Ukrainian victory is within relatively easy reach. 

The Ukrainians have soldiers who are determined to save their country. The West has weapons that the Ukrainians need. Victory over Russia — and the demise of Russian fascism — is simply a question of bringing the soldiers and the weapons together.

Alexander J. Motyl is a professor of political science at Rutgers University-Newark. A specialist on Ukraine, Russia and the USSR, and on nationalism, revolutions, empires and theory, he is the author of 10 books of nonfiction, as well as “Imperial Ends: The Decay, Collapse, and Revival of Empires” and “Why Empires Reemerge: Imperial Collapse and Imperial Revival in Comparative Perspective.”

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Why high housing costs could keep climbing

Sky-high mortgage rates and a construction slowdown could push record rents and home prices even higher, further threatening housing affordability for millions of Americans. 

Economists say that rising mortgage rates should cool down the housing market’s red-hot price appreciation in the short term but are also likely to drive up rents. New construction of houses and apartments is waning, suggesting that the nation’s meager housing supply won’t improve any time soon. 

“It’s a perfect storm right now,” said Jerry Konter, a Savannah, Ga., residential property builder who chairs the National Association of Home Builders. “I don’t think I’ve ever seen this many red flags at one time in my entire career.” 

Total housing starts fell 14.4 percent from April to May, reaching a 13-month low, according to Commerce Department data released last week. Construction of multifamily housing, which includes apartments, plummeted 23.7 percent month-over-month.  

Home builders expect that trend to continue, warning that they’re under pressure from rising interest rates, global supply chain snags, higher material costs, a shortage of workers and other issues that are slowing down new construction.  

The building slowdown comes as home prices remain at record highs. An average home in the U.S. sells for more than $430,000, according to real estate brokerage Redfin, which found that home prices rose 14.8 percent over the last year and 60 percent in the last five years. 

The price appreciation is driven by dwindling housing supply that took a deep dive during the pandemic. Less than 1.5 million homes were listed for sale last month, down from 2.4 million during the same period five years ago. 

Those looking for lower-cost homes are running out of options. Builders aren’t erecting many houses that first-time home buyers can afford, because the current environment makes it difficult for them to turn a profit on those projects, Konter said. 

“The first-time homebuyer is being squeezed, which also squeezes renters, because those people are no longer moving out of their apartments, and so rents are going to go up,” he added. 

Rents have steadily risen alongside house prices. Redfin found that the median monthly rent surpassed $2,000 last month and rose 15.2 percent over the last 12 months. 

“Although we expect rent-price growth to continue to slow in the coming months, it will likely remain high, causing ongoing affordability issues for renters,” Redfin deputy chief economist Taylor Marr said in a note, adding that mortgages are outpacing rents in some areas and more Americans are choosing to live alone. 

Advocates have warned that the affordability crisis will lead to increased homelessness. A recent U.S. census study found that 8.8 million Americans were behind on their rent payments from late April to early May, up from 1.7 million individuals one year ago.  

The Federal Reserve hiked interest rates by 75 basis points last week in its fight to cool down the nation’s surging inflation. The move, which will make it more expensive to build new homes, prompted the average 30-year fixed mortgage rate to rise to 5.78 percent, the highest mark in over a decade, according to Fannie Mae. 

Higher mortgage rates are pricing first-time buyers out of the market. Under current 30-year rates, the monthly payment on a $430,000 loan is more than $2,500, up from roughly $1,800 one year ago.  

Federal Reserve Chairman Jerome Powell acknowledged that home prices “might keep going up for a while even in a world where rates are up” and indicated that first-time homebuyers should stay on the sidelines for now. 

“I would say if you’re a homebuyer, or a young person looking to buy a home, you need a bit of a reset,” Powell said during a press conference. “We need to get back to a place where supply and demand are back together and where inflation is down low again and mortgage rates are low again.”  

It’s unclear when that will be. Some economists point to May home completions increasing 9.3 percent year-over-year, including a 33.2 percent increase in multifamily completions, as one reason to be optimistic that housing supply will recover.  

Others, like Powell, are hoping for the completion of a massive supply of unfinished homes that have been delayed by supply chain issues and labor shortages. Home builders warn that those delays will continue to plague the construction of new homes.  

The U.S. faces a shortfall of 1.5 million homes, according to a study from Moody’s Analytics, and that number could continue to rise as more millennials look to buy their own houses. The National Low Income Housing Coalition estimates that the U.S. has a shortage of 7 million rental homes that are affordable for extremely low-income renters. 

Last month, President Biden announced an action plan that attempts to close the housing shortfall within five years. The White House aims to incentivize local governments to build denser cities with more affordable housing, create new financing mechanisms for manufactured homes, expand federal financing and rehabilitate hundreds of thousands of homes, among other measures. 

“The plan’s policies to boost supply are an important element of bringing homeownership within reach for Americans who, today, cannot find an affordable home because there are too few homes for sale in their communities,” the White House said in a statement.

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Economists look past the Fed to fight inflation

Economists are looking beyond the Federal Reserve and thinking outside the box of monetary policy for ideas on how to fight inflation. 

With gas prices soaring, they are focusing largely — though not exclusively — on the energy industry and are increasingly coming up with ideas on how to bring down prices for consumers that cross the traditional liberal-conservative divides. 

Larry Summers, who served as Treasury secretary under former President Clinton and director of the National Economic Council under former President Obama, over the weekend called on lawmakers and the Biden administration to increase domestic oil production as a means of battling inflation, a stance that puts him in conflict with environmentalists and many Democrats who want to see the U.S. use less oil due to its contribution to global warming. 

Speaking to NBC, Summers echoed one of the most frequently repeated Republican talking points on Capitol Hill regarding inflation, calling for “an all-in, more energy supply approach that emphasizes freeing up fossil fuels in various ways in the short run.”  

Summers qualified his recommendation by saying that over the longer run the U.S. economy should be “making, with government support, the ultimate pivot to renewables.” 

Increasing domestic oil production, along with bringing down pharmaceutical drug prices and getting rid of some of the former President Trump-era tax cuts, would “take pressure off the Fed, would bring down the inflation rate, would operate to restore confidence, and would, I think, be a very positive contribution,” he added. 

His comments came as inflation that’s at a 40-year high and the possibility of a recession in the next year is spooking average consumers and markets alike. The Federal Reserve last week raised interest rates by 0.75 percent, the largest single increase in its history. The central bank is trying to walk a tricky tightrope of bringing down inflation without triggering a recession. Summers on Sunday said his “best guess” was that one would happen.  

Keeping consumer prices stable is a key part of the Fed’s mandate, and in the months since inflation began soaring most eyes have been focused on the central bank. 

But experts are also pointing to fiscal policies known as “supply-side interventions” meant to target issues in supply chains, which nearly all economists believe to be the root cause of the inflation in the wake of the pandemic. 

Just as Summers, a Democrat, hopped on the conservative bandwagon of opening up domestic fossil fuel production to alleviate transportation costs and prices at the pump, some conservative economists have been advancing inflation-fighting arguments traditionally associated with liberals. 

The idea of a carbon tax, long seen on Capitol Hill as a non-starter among conservatives, received an endorsement last week from the Tax Foundation, a right-leaning Washington think tank focusing on domestic economic policy issues. 

Economists there argued that as increasing interest rates make the national debt more expensive for taxpayers to pay off, a carbon tax would be a good way to take some demand out of the economy and extend the purchasing power of the dollar. 

“As inflation, driven in large part by profligate deficit-financed spending, becomes a larger issue, and as concern about the national debt reenters the conversation, a carbon tax would be a convenient way to address both issues while working towards the policy objective of lowering carbon emissions,” Tax Foundation economists Huaqun Li and Alex Muresianu wrote in a report released this month, titled “Carbon Taxes and the Future of Tax Reform.” 

“Carbon taxes are an option to make the market reflect future costs of carbon emissions, discouraging emissions and incentivizing development and implementation of clean technology,” the report said. 

Carbon taxes, however, are not part of any legislative package that could realistically be enacted in a short enough time frame to reduce reliance on hydrocarbon fuels and make a difference on inflation, which stands now at 8.6 percent and may still be rising. 

President Biden, who released oil to the market from U.S. petroleum reserves in April, has argued that losing sight of the longer-term move to renewable energy in favor of producing more oil in the shorter term is neither good national strategy nor in the interest of the energy sector. 

Speaking earlier this month at the Port of Los Angeles — a site of many of the supply chain disruptions driving inflation — Biden said that big energy companies have thousands of unused oil drilling permits that they simply don’t want to use. 

“They have 9,000 permits to drill. They’re not drilling. Why aren’t they drilling? Because they make more money not producing more oil. The price goes up,” he said. 

But this hesitancy to drill may be motivated by more than just quarterly profits and may be a part of the same industry-changing forces that are driving the move toward renewable energy sources. 

“There was a time when everybody invested in canals in the United States, because that was going to be the future. But that lasted maybe 20 years, and then these things called railroads came along,” Edward M. Emmett, an energy and transportation fellow at Rice University’s Baker Institute for Public Policy, said in an interview. “And so I’m one of those that thinks that all this effort toward electric is going to meet the same fate, because we’re going to end up with a hydrogen fuel or biofuels or something else.” 

“On the energy front, everybody seems to have bought into the idea that it’s not going to be wise to invest a whole lot into carbon fuels, which is why we’re seeing the fight between the White House and others: ‘You’ve got these leases — why aren’t you drilling them?’ Well, one of the reasons is they don’t know if there’s going to be a market for those,” Emmett said.  

This suggests that the move to renewable energy sources, as well as the determination of the dominant renewable energy sources, could be an even higher priority for lawmakers as they consider additional supply-side interventions to bring down inflation. 

Regardless of industry specifics, the international pressure to curb emissions has never been higher. 

“Limiting global warming will require major transitions in the energy sector,” the United Nations Intergovernmental Panel on Climate Change said in an April statement released with their latest report on climate change. “This will involve a substantial reduction in fossil fuel use, widespread electrification, improved energy efficiency, and use of alternative fuels (such as hydrogen).” 

And Biden on Monday also repeated some of his calls for inflation-fighting interventions outside the Fed’s purview. 

Responding to Summers’s comments on Monday, Biden said Congress should pass tax reforms and pointed to efforts to cut health care costs. 

“I think we’re going to be able to get a change in Medicare and a reduction in the cost of insulin,” Biden said. “We also can move in a direction that we can provide for tax increases … on those in the corporate area as well as individuals as it relates to Trump’s tax cuts.”

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