Trump Federal Gas Tax Pause Proposal Meets Early Resistance in Congress

With gasoline prices averaging $4.52 per gallon — up 46% since the Iran conflict began disrupting crude flows through the Strait of Hormuz in February — President Trump told CBS he wants to "take off the gas tax for a period of time" [1]. The proposal would suspend the 18.4 cents-per-gallon federal excise tax on gasoline and the 24.4 cents-per-gallon tax on diesel, a move Congress has never approved despite repeated calls during past price spikes [2].

Within hours, Sen. Josh Hawley (R-MO) announced legislation for a 90-day suspension with a presidential option to extend for another 90 days [3]. Rep. Jeff Van Drew (R-NJ) introduced a competing bill with an 18-month timeline and a gradual phase-back [2]. Rep. Anna Paulina Luna (R-FL) pledged a House companion [2]. But the proposal ran into immediate headwinds from the most consequential Republican on Capitol Hill: Senate Majority Leader John Thune, who said he had "not, in the past, obviously been a fan of that idea," though he later softened his stance slightly, emphasizing that reopening the Strait of Hormuz should be the priority [2].

The Money at Stake: $11.5 Billion and a Fund Already in the Red

The Penn Wharton Budget Model estimates that a four-month suspension from June 1 to October 1, 2026, would drain $11.5 billion from the Highway Trust Fund (HTF) — $8.44 billion from foregone gasoline taxes and $3.06 billion from diesel [4]. That represents roughly 19% of one year's HTF outlays.

The fund is already structurally insolvent. In fiscal year 2026, the Tax Foundation projects the HTF will collect $44.2 billion in revenue against $61.4 billion in spending — a deficit of $17.2 billion [5]. Since 2008, Congress has transferred $275 billion from the general fund to keep the HTF afloat, including $118 billion authorized under the 2021 Infrastructure Investment and Jobs Act [6].

Source: Tax Foundation / CBO

Data as of May 1, 2026CSV

The HTF finances federal highway construction and maintenance, bridge repair, and mass transit programs. The Congressional Budget Office projects the highway account balance could approach zero by fiscal year 2028 without additional transfers [7]. Stripping another $11.5 billion from the fund would accelerate that timeline.

Carl Davis, research director at the Institute on Taxation and Economic Policy, said the lost revenue "gets tacked on the debt" and called the proposal "really for show" [5].

What Drivers Would Actually Save: The Pass-Through Problem

A gas tax holiday does not guarantee that every cent of the suspended tax reaches consumers at the pump. The Penn Wharton analysis estimates a pass-through rate of 72% for gasoline and 60% for diesel [4]. That means gas prices would fall an average of 13.2 cents per gallon rather than the full 18.4 cents, and diesel would drop 14.6 cents rather than 24.4 cents [4].

Source: Penn Wharton Budget Model

Data as of May 12, 2026CSV

For a household filling a 15-gallon tank weekly, the estimated savings over 122 days total roughly $35 [4]. GasBuddy analyst Patrick De Haan put it bluntly: "That 18 cents doesn't really amount to a whole lot, in my mind" [8].

The 2022 state-level experiments reinforce the point. When Maryland suspended its 36.1 cent-per-gallon tax for 30 days, about 72% of the tax cut reached consumers [9]. Connecticut's suspension of its 25 cent-per-gallon tax initially lowered prices by 23 cents within two weeks, but the benefit eroded to just 11 cents after six weeks as market dynamics absorbed the rest [9]. Academic research published in Energy Economics in 2024 found that pass-through rates varied significantly by region, with areas subject to reformulated gasoline requirements seeing lower pass-through because of constrained supply flexibility [10].

Andrew Lautz of the Bipartisan Policy Center identified a structural irony: "The irony of a gas tax suspension is that the higher prices go, the less of an impact it has" [8]. When gasoline costs $4.52, an 18.4 cent reduction amounts to a 4% price cut — noticeable, but unlikely to change household spending patterns.

The Global Oil Market Complication

Economists have long warned that because gasoline prices are driven by global crude oil markets, a domestic tax suspension can be partially offset by supply-side adjustments. When demand rises (or stays constant) because prices drop slightly, refiners and distributors can capture some of the margin [11].

Short-run gasoline demand is relatively inelastic — people need fuel regardless of small price changes — which gives suppliers some ability to absorb part of the tax reduction as higher margins rather than passing it through to pump prices [4]. De Haan noted that "reducing or limiting taxes may actually do more to further the imbalance between supply and demand," particularly when refining capacity is already strained [8].

No major economic institution has published a comprehensive model of how much of a federal gas tax suspension would be captured by domestic refiners versus reaching household budgets in the current market environment. The 2022 state experiences and Penn Wharton's 72% pass-through estimate remain the best available approximations.

A Tax Frozen Since 1993: The Inflation Argument

Defenders of a gas tax pause point to an uncomfortable fact for fiscal hawks: the federal gas tax has not been raised since 1993. Adjusted for inflation, the 18.4 cent tax would need to be approximately 40.8 cents per gallon to maintain equivalent purchasing power [12]. In real terms, the federal gas tax is effectively at its lowest level in over three decades.

Source: Tax Foundation / OECD

Data as of Jan 1, 2025CSV

The U.S. combined federal and state gas tax averages about 52.4 cents per gallon — the second-lowest rate among OECD nations, above only Mexico [13]. By comparison, Canada taxes fuel at roughly $0.74 per gallon, Japan at $2.40, Germany at $2.79, and the OECD average sits at $2.24 per gallon [13].

This creates a steelman argument for the suspension: because the real value of the tax has eroded so dramatically, suspending it would cost the Treasury less in inflation-adjusted terms than critics suggest. The counter-argument is that the HTF's chronic underfunding is precisely the result of this erosion, and a suspension would compound an existing structural problem rather than provide meaningful relief.

Who Benefits — and Who Doesn't

The federal gas tax is regressive in proportional terms. Households in the lowest income quintile spent about $1,177 on gasoline annually (3.4% of total spending), while the highest quintile spent $3,477 (2.3% of spending) [14]. A gas tax suspension delivers more dollars to higher-income households — they buy more fuel — but represents a larger share of lower-income household budgets.

Rural and high-commute households would see larger absolute benefits because they consume more gasoline. Urban households with access to public transit and shorter commutes would benefit less. This creates a tension for policymakers: the populations most burdened by high gas prices are also those most dependent on the road infrastructure the HTF funds.

Rep. Brendan Boyle (D-PA) proposed an alternative that attempts to address the equity question: suspend the gas tax only when prices exceed $4 per gallon, and offset the lost revenue by redirecting $30 billion in oil and gas subsidies to the Highway Trust Fund [2]. The proposal has not gained traction in the Republican-controlled Congress.

The Gasoline Price Spike in Context

Source: BLS / Bureau of Labor Statistics

Data as of Mar 1, 2026CSV

The CPI gasoline index hit 328.9 in March 2026, up 18.9% year-over-year, driven primarily by the Iran conflict's disruption of roughly 20% of global crude oil transit through the Strait of Hormuz [1][15]. Eighty percent of Americans report that gas prices are straining their budgets, and 63% blame Trump "a great deal" or "a good amount" for the increases [1].

This political pressure explains the urgency behind the proposal, even from an administration that has generally resisted tax cuts without corresponding spending reductions in other areas.

The Legislative Math: Why It Probably Stalls

The gas tax suspension faces three potential legislative pathways, each with significant obstacles.

Standalone legislation would require 60 votes in the Senate to overcome a filibuster. With Republicans holding 53 seats, Hawley's bill would need at least seven Democratic votes [3]. Senate Minority Leader Chuck Schumer has not rejected the concept outright but framed the issue as inadequate: "Americans don't need just a few cents back. They need an end to the chaos" [2]. Democratic Sens. Mark Kelly and Richard Blumenthal, along with Rep. Chris Pappas, introduced their own bill suspending the tax through October 1, 2026, suggesting some bipartisan support exists in principle [2].

Budget reconciliation could bypass the filibuster with a simple majority, but Senate Republicans are already moving a reconciliation package focused on other priorities [3]. Adding a gas tax provision would require the Senate parliamentarian to rule it has a sufficient budgetary impact to qualify under the Byrd Rule, and it would compete with other tax provisions for limited reconciliation bandwidth.

Executive action is not a viable path. The gas tax is an excise tax established by statute, and suspending it requires congressional action — the president cannot unilaterally waive it [2].

Thune's tepid response is the most significant signal. As majority leader, he controls what reaches the Senate floor. His historical opposition to gas tax holidays — including rejecting a similar proposal during the Biden administration — combined with his stated concern about deficit-funded tax cuts, suggests the bill faces a difficult path through the upper chamber even with presidential backing [2][16].

The 2014-2015 Precedent: What Happens When the Fund Runs Dry

The last time the HTF faced a critical shortfall provides a concrete preview of what could follow. In 2015, the CBO projected that highway account spending of $44 billion would exceed revenue of $34 billion by $10 billion [7]. The mass transit account faced a parallel $3 billion gap [7].

The Department of Transportation warned that it would need to delay reimbursement payments to state DOTs to keep the fund's balance above zero [17]. Eight states preemptively cut transportation spending for fiscal year 2015 [17]. The prospect of delayed federal reimbursements threatened active construction projects and debt repayment schedules for states that had borrowed against expected federal funds [17].

Congress eventually transferred $51.9 billion to the highway account under the FAST Act to prevent a crisis [6]. But the damage to state planning was real: reduced reimbursement frequency forced state DOTs to scale back infrastructure investments, including safety and maintenance projects [17].

Today, the Infrastructure Investment and Jobs Act's spending authorizations expire at the end of fiscal year 2026 [6]. If the HTF balance drops further because of a gas tax suspension, the projects most vulnerable to delay would be those in the pipeline but not yet under contract — new highway expansions, bridge replacements, and transit improvements that states have planned around expected federal funding levels.

Competing Bills, Competing Priorities

The proliferation of competing proposals — Hawley's 90-day bill, Van Drew's 18-month version, Luna's House companion, the Kelly-Blumenthal Democratic alternative, and Boyle's price-triggered offset plan — reflects a Congress that agrees gas prices are a political problem but cannot agree on a solution [2][3].

The Bipartisan Policy Center estimates that a five-month suspension would cost the HTF $17 billion [18]. The Tax Foundation notes that the fund has run deficits for 20 consecutive years [5]. Neither organization has endorsed a suspension.

The fundamental tension is straightforward: the gas tax suspension is popular because it is visible and immediate. The costs — deferred road maintenance, delayed transit projects, a further-depleted trust fund — are diffuse and slow-moving. Whether Congress can resist the political appeal of a $35-per-household gesture during a period of genuine price pain will test whether fiscal concerns carry weight against a president demanding action.