Story perspectives

Trump, Congress Seek Fuel Tax Halt, Risk $10.5B Deficit

5/20/2026

Summary

Trump Cuts Fuel

U.S. President Donald Trump and Congress plan to suspend 18.4-cent gasoline and 24.4-cent diesel taxes.
Prices rose to $4.53 for gasoline and $5.65 for diesel per gallon on May 19.
Critics say the 18-cent cut could boost fuel use, leave 40 % of highways crumbling, and save drivers $9 per month.
The Committee for a Responsible Federal Budget warns of $10.5 billion shortfall and $3 billion interest, shifting insolvency seven weeks earlier than 2028.

Summary

Legislators Offer Credits

Legislators could issue refundable credits or direct payments to moderate-income households for sharp price spikes.
The plan would allow employer commuter assistance for workers and let a credit cover mobility costs.
Andrew Leahey, assistant professor of law at Drexel Kline School of Law, warns that a holiday without a backfill is a poorly targeted discount and recommends pairing it with a gas tax, a mileage-based fee, or EV road-use charges.

Summary

CRS Analyzes Fuel

CRS calculates that an 18.4-cent suspension would keep gasoline more than $1.30 per gallon above February 23 2026 levels.
The federal fuel tax, about 4 percent of the retail price, is collected upstream from roughly 850 suppliers, distributors, refiners and blenders.
State-level studies show 70 percent of the tax reduction reaches consumers through lower prices.
CRS notes that ensuring consumer benefit would require estimating counterfactual local prices, a task complicated by many market forces.

History

Historical Context

The 1973 Arab oil embargo, led by OPEC and Saudi Arabia, prompted President Richard Nixon to sign the Emergency Petroleum Allocation Act on Nov 27 1973 and saw U.S. gasoline prices jump 43 % within a year. That crisis spurred rationing and price caps. Today Donald Trump and Congress propose suspending the 18.4-cent federal fuel tax, echoing the 1973 short-term relief effort.

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Trump Cuts Fuel

U.S. President Donald Trump and Congress plan to suspend 18.4-cent gasoline and 24.4-cent diesel taxes.
Prices rose to $4.53 for gasoline and $5.65 for diesel per gallon on May 19.
Critics say the 18-cent cut could boost fuel use, leave 40 % of highways crumbling, and save drivers $9 per month.
The Committee for a Responsible Federal Budget warns of $10.5 billion shortfall and $3 billion interest, shifting insolvency seven weeks earlier than 2028.

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