Trump Backs Federal Gas Tax Suspension as Congress Prepares Legislation

President Donald Trump said Monday he intends to temporarily suspend the 18.4-cent federal gas tax, backing a legislative push that requires an act of Congress and would cost the Highway Trust Fund more than $11 billion — at a moment when that fund’s authorization statute is on course to expire in four months and has not yet been renewed.

“We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in,” Trump told CBS News correspondent Nancy Cordes in a phone interview Monday morning. He did not specify a price threshold or a scheduled end date for the suspension.

The national average for a gallon of regular gasoline reached $4.52 on Sunday, according to AAA — up roughly 52 percent from the day before the United States launched military operations against Iran on February 28. Senate analysts have estimated the surge will cost a two-car American household approximately $1,753 more for fuel this year than in 2025. Trump’s endorsement came as congressional Republicans face mounting pressure from constituents headed into the 2026 midterm elections, and as some Senate allies are running primaries in which the gas price surge has become a central issue.

The Bills Taking Shape in Congress

Senator Josh Hawley of Missouri introduced legislation Monday to suspend both the 18.4-cents-per-gallon federal gasoline tax and the 24.4-cents-per-gallon diesel tax for 90 days after enactment. The bill includes a provision allowing the president to extend the suspension for an additional 90-day period if he certifies that fuel market conditions still warrant relief — potentially stretching a full holiday through the end of 2026.

Representative Anna Paulina Luna of Florida announced the same day she would introduce a companion bill in the House. “American families need this relief on gas prices,” Luna wrote on social media, adding that her office would work directly with the Trump administration on the measure.

The political dynamics behind Monday’s announcements are more complicated than the unified Republican push suggests. In Texas, Democratic Senate nominee James Talarico had been calling for a federal gas tax suspension since April, before Trump weighed in. When Talarico first raised the proposal, Senator John Cornyn — who faces a May 26 Republican primary runoff — dismissed it as a “short-sighted solution” and warned that it would “explode the deficit and debt.” On Monday afternoon, after Trump endorsed the idea, Cornyn reversed course. “There’s a difference between a temporary suspension and a permanent suspension,” he told reporters at the Capitol. “I think a temporary suspension getting through this sort of bumpy time because of uncertainty about energy prices — I could live with that.”

There is also an earlier Democratic bill that has drawn less attention than the Hawley legislation. Senators Mark Kelly of Arizona and Richard Blumenthal of Connecticut, along with Representative Chris Pappas of New Hampshire, introduced a measure on March 9 to suspend the federal gas tax through October 1, 2026. That legislation stalled in committee. Whether its Democratic sponsors will now vote for the Republican-authored Hawley version — introduced under explicit White House backing — or reintroduce their own bill remains unclear.

One thing all versions of the proposal share: none of them can take effect through executive order. The federal excise tax is set by statute, and suspending it requires a majority vote in both chambers of Congress. Despite proposals surfacing during the 1970s energy crisis, the 2008 price spike, and the Biden administration’s 2022 push when national prices crossed $5 per gallon, Congress has never once enacted a federal gas tax holiday. The current push faces the same structural hurdle every prior attempt has confronted.

How Much Relief Would Drivers Actually See?

The 18.4-cent headline figure significantly overstates the relief drivers would receive at the pump. A Penn Wharton Budget Model analysis of a four-month federal gas tax suspension found that retail gasoline prices would fall by approximately 13.2 cents per gallon — not the full tax amount. The gap reflects the inelastic nature of short-run gasoline demand: because most drivers need to fill their tanks regardless of modest price changes, fuel suppliers can retain a portion of the tax savings as higher margins rather than passing the full benefit to consumers. Penn Wharton put the effective pass-through rate at roughly 72 percent.

For diesel, the 24.4-cents-per-gallon federal levy would likely translate to approximately 14.6 cents of actual price relief at the pump under similar conditions, according to analysis from the Bipartisan Policy Center.

Put concretely: at $4.52 per gallon, a driver purchasing a 15-gallon fill-up would save roughly $1.98 if the full 18.4-cent tax were passed through. Under the Penn Wharton pass-through estimate, that savings figure shrinks to approximately $1.49 per fill-up — meaningful relief for frequent drivers, but a fraction of the more than $1.40-per-gallon increase since February.

The more fundamental challenge is that the gas price surge is supply-driven. Reduced Iranian crude exports and disruptions to Strait of Hormuz shipping have created a structural shortfall that a demand-side tax cut does nothing to address. Reducing the tax at the pump could temporarily increase driving demand, putting upward pressure on the underlying price. How much of the tax savings flow to consumers versus producers depends on how quickly the supply constraint eases — a variable determined by diplomacy, not by anything Congress can legislate.

The broader economic drag from the Iran war’s energy shock has already appeared in the April jobs data, which showed slowing wage growth alongside headline employment numbers that beat forecasts — a mixed picture that complicates the Federal Reserve’s rate path.

The Highway Trust Fund Is Already Under Strain

The proposal arrives at one of the most consequential moments in federal highway finance in decades. The Infrastructure Investment and Jobs Act — the bipartisan 2021 infrastructure law that authorized $118 billion in general fund transfers to keep the Highway Trust Fund solvent — expires on September 30, 2026. No surface transportation reauthorization bill had been introduced in either chamber as of early 2026. The Congressional Budget Office projects a $166 billion funding gap over the five-year period following the IIJA’s expiration.

A gas tax suspension would inject immediate additional cost into that strained environment. Every day the excise taxes are paused drains the Highway Trust Fund of approximately $68 million in lost revenue, according to congressional estimates. A 90-day suspension under Hawley’s bill would remove roughly $6.1 billion from the fund before the presidential extension authority kicks in. If the president exercises that authority for a full additional 90 days, the total HTF cost would approach $12.2 billion over six months.

The Penn Wharton Budget Model estimated a four-month holiday beginning June 1 would cost the HTF $11.5 billion. The Bipartisan Policy Center put the net federal deficit increase from a five-month suspension at roughly $12 billion, after accounting for partially offsetting gains from higher economic activity. Every year the fund collects approximately $44 billion from fuel excise taxes against annual outlays of $61 billion — a structural gap that has required emergency general-fund transfers every year since 2008. A gas tax holiday would widen that gap at the precise moment Congress needs to negotiate a new reauthorization framework.

The practical consequence for states is direct: delayed federal reimbursements for highway construction projects already under contract if the authorization lapses without a replacement.

What Congress Has to Do — and How Fast

The gas tax’s unbroken record is not accidental. The rate has not changed since 1993, when President Clinton’s budget reconciliation act set it at 18.4 cents per gallon. In the thirty-three years since, Congress has never suspended the levy. The reasons are consistent: the highway fund needs the revenue, consumer savings are modest relative to price swings, and the supply side of any price spike is beyond the tax code’s reach.

The current moment differs from prior attempts in one concrete way: a sitting president has explicitly endorsed the move and allies in both chambers are drafting legislation. Whether that changes the outcome depends on whether Senate Majority Leader John Thune is willing to bring it to the floor as a standalone bill, whether it could move through reconciliation to avoid a filibuster, and whether the Democrats who sponsored the March version will vote for the Hawley successor. Thune had not made a public statement on the bill as of Monday evening.

The Iran war has created economic pressures well beyond the gas station. The 30-year mortgage rate has climbed to 6.22 percent since the Strait of Hormuz disruptions, driven by bond market inflation expectations that the Federal Reserve has been reluctant to counter with rate cuts. A gas tax suspension that increases short-term fuel demand could complicate that inflation calculus further.

Trump is scheduled to travel to Beijing later this week for a summit with Chinese President Xi Jinping, where aides have indicated a deal for Chinese purchases of American energy exports could be on the table — a potential supply-side contribution to price relief that the gas tax holiday, as a demand-side measure, cannot provide on its own. If ceasefire negotiations advance or energy supplies begin to normalize before Congress acts on Hawley’s bill, the political urgency driving the effort may diminish before any consumer relief reaches the pump.