Democrats Weigh Gas Tax Waiver, Deficit Cuts as Inflation Rises

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WASHINGTON – The White House and congressional Democrats, concerned about rapidly rising prices across the country that could embitter voters ahead of the looming midterm elections, are discussing the temporary suspension of the federal gas tax and revamping their domestic policy agenda to include an effort to reduce the budget deficit.

The talks aim to address widespread economic anxiety and salvage whatever they can from President Biden’s sprawling social safety net, climate bill and tax hikes, known as Build Back Better Act, before members of Congress face voters in November.

At a private lunch on Tuesday, Democrats debated a range of laws aimed at lowering the costs of food and other essentials, according to senators and aides briefed on the private discussion, including a plan, proposed last week, to suspend the gasoline tax of 18.4 cents per gallon until Jan. 1.

“We’re going to be laser-focused on cutting costs – new proposals and new ideas keep coming in,” said Sen. Chuck Schumer of New York, the Majority Leader, who clearly prioritized questions about “cost cutting” at his weekly press conference. . “We’re going to come up with legislation and we’re going to move forward, and we’re going to go back to our states and start talking about these things.”

Many Democratic senators facing tough re-election battles this year have rallied around the idea of ​​a gas tax exemption, touting it as an easy way to provide economic relief. Senator Mark Kelly, an Arizona Democrat and one of the legislation’s leading supporters, described it on Tuesday as “something that directly helps people right now when they need it.”

White House officials haven’t dismissed the idea as a way to temporarily reduce high gasoline prices. But he seemed unlikely to get enough support to pass the Senate, where a 60-vote supermajority is needed to push through most legislation, and lawmakers in both parties have worried about his effectiveness in pushing down prices for consumers and how it would be restored. .

Sen. Joe Manchin III of West Virginia, a key Democratic centrist, said bluntly Tuesday that the plan “doesn’t make sense.”

Democrats are also quietly offering ways to revive Mr. Biden’s domestic policy plan, including scaling it back significantly from the $2.2 trillion version passed in the House last fall, which Mr. Manchin described as unacceptable, especially in light of rising inflation.

They proposed ways to narrow the scope of the measure, prioritizing $500 billion to address climate change, expanding Affordable Care Act grants and a measure to reduce the cost of prescription drugs, according to officials involved in preliminary talks who spoke on condition of anonymity to discuss them. Privately, Mr. Biden’s economic team has been talking for weeks about including a deficit-cutting measure in the package, to address Mr. Manchin’s concerns about the national debt.

Mr. Biden’s economic advisers are also acutely aware of the need for him to aggressively deal with rising prices, which is contributing to the sentiment among many Americans that the economy is deteriorating, despite record oil growth. use.

Privately, his top aides say they recognize the importance of dealing with the economic pain that many Americans are feeling and hope Congress will pass legislation to help them. Consumer price index data for January beat forecasts, showing prices jumped 7.5% on the year and 0.6% on the last month.

On Capitol Hill, lawmakers have stepped up their efforts to find a solution.

“It’s more than trying – I think it’s important that we do something about it,” said Sen. Jon Tester, Democrat of Montana, who spoke at lunch Tuesday about his bipartisan proposal to fight anti-competition in the meatpacking industry as a way to drive down prices. , according to an aide.

Senator Debbie Stabenow of Michigan, a Democratic leadership member and co-sponsor of the gas tax legislation, said, “There’s more to do, and that’s what we’re focused on for the coming year, in terms of the costs that families feel every day.

White House officials have also sought to draw attention to a series of actions aimed at containing prices, including efforts to increase competition in the meatpacking industry, eliminate bottlenecks in bottlenecks at ports and addressing the global shortage of semiconductors, which is driving up the cost of cars. .

Republicans, who have gleefully hammered Democrats for their failure to fight inflation, scoffed at a gas tax holiday, arguing it would do little to solve the country’s economic problems and that it was more of a gamble to provide political cover.

“I think this is a desperate cry for help,” said Sen. John Thune of South Dakota, the No. 2 Republican and among senators vying for re-election this year. “I think they’re realizing that they’re on the wrong side of the energy issue and the wrong side of the inflation issue, and, you know, the American people are going to want answers.”

In remarks Tuesday to the National Association of Counties, Mr. Biden made the case for his broader social spending measure, arguing that providing money for childcare, prescription drugs and care workers home health could help cut costs for millions of Americans.

“There is a real inflation, and if you are in a working-class family, it hurts. That’s why my Build Back Better plan — what is it about,” he said. “Listen, families are crushed by the cost of everyday things.”

But Mr. Biden’s top aides are eager to keep him out of a public back-and-forth with lawmakers. They said they believed endless negotiations with members of his own party last year had made him look weak and had helped to lower his approval rating.

And on Capitol Hill, senators and their aides warned that conversations remained preliminary, as they focused on confirming Justice Stephen G. Breyer’s replacement on the Supreme Court and negotiating an omnibus spending package to maintain the fully funded government.

“We have many discussions with individual senators to revive Build Back Better,” Schumer said Tuesday. “We sit and discuss things with Senator Manchin, and we want to hear what he has to say.”

While initially aiming for a multi-trillion-dollar domestic policy initiative, some Democrats have said they would be willing to include deficit-cutting provisions if it meant seeing some of their spending priorities enacted.

Sen. Brian Schatz, Democrat of Hawaii, said he would “reluctantly” consider doing so, if it was the only way to get part of Mr Biden’s plan through.

But he added: ‘I don’t think there’s any doubt that people are resentful and struggling with the rising cost of living, and we need to show a collective resolve to focus on that.’

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