In Denver to highlight the impacts of the Biden administration’s COVID-19 relief bill, Treasury Secretary Janet Yellen on Friday discussed the possibility that the administration might push for a temporary suspension of the federal gas tax.
That’s something Colorado’s Democratic governor, Jared Polis, has to consider in the wake of Russia’s invasion of Ukraine.
“We’re looking at a range of things that we might do to relieve consumers of the gas tax,” Yellen said Friday at the Mi Casa Resource Center in west Denver.
Yellen didn’t commit to the idea fully. There are concerns within the administration that the move could benefit oil companies more than consumers at a time of tight supply. The supply strain can be attributed in part to President Joe Biden banning Russian oil imports amid the country’s ongoing military offensive in Ukraine.
Polis stood next to Yellen on Friday. The governor, second gentleman Doug Emhoff and a handful of Denver officials appeared at the resource center to discuss the American Rescue Plan Act, the piece of the legislation that the Biden administration pushed last March to fuel the country’s economic recovery from the COVID-19 recession. Mi Casa received $325,000 in support through that legislation, granted by the city of Denver.
The economy is growing, and the federal unemployment rate fell to 3.8% in February. But Yellen acknowledged that inflation is a problem. Efforts by the Federal Reserve to combat that through higher interest rates could trigger a recession, but Yellen has faith the Fed can steer clear of that outcome, she said.
Polis was asked Friday what he would like to see federal officials do to ease price burdens on Coloradans, and he mentioned a federal gas tax holiday he and five other governors are supporting. The group is backing legislation that would suspend the federal tax through the end of the year. The 18.3-cents-per-gallon tax supports the Federal Highway Trust Fund.
Gas prices are spiking across the country, including in Colorado, where the average price hit $3.75 a gallon on Monday, according to AAA. That’s the highest fuel price in the state since June 2013. AAA projects that Colorado is on a path to eclipse its all-time record for gas prices of $4.09 per gallon, which was set in 2008.
Polis is moving to delay a 2-cents-per-gallon gas fee that was supposed to take effect in Colorado this year, part of his efforts to reduce costs for state residents in a variety of ways.
“We’re really looking at everything we can do as a state to reduce costs, and I certainly encourage the federal government to do the same to alleviate some of that pressure that people are feeling because of increasing costs,” he said Friday.
Yellen emphasized that spiking gas prices largely can be attributed to the Russia-Ukraine war and the economic ripple effects of international sanctions against Russia.
“The worst impacts are on Russia itself, which is our intention, but there are spillovers to the United States and to the other countries,” Yellen said. “That’s unavoidable, and I think the American people understand the importance of suffering some toll themselves in order to uphold the values that we hold dear and we think are fundamental to a peaceful world order.”
