Rounds Calls for Federal Gas and Diesel Tax Suspension to Lower Prices at Pump, President Trump to Invoke Defense Production Act
PIERRE – Senator Mike Rounds (R-S.D.) called for a suspension of the federal gas and diesel tax for 90 days in a letter today to President Donald Trump. Additionally, Rounds asked states to consider suspending their own gas and diesel taxes. This would temporarily save consumers on average 60 cents per gallon on diesel fuel and 52 cents per gallon on gasoline. To offset the loss of revenue to the Highway Trust Fund, Congress can consider authorizing a one-time transfer from the General Fund. Rounds also urged President Trump to consider using his authority under the Defense Production Act to help domestic refineries expand their capacity, including refining capacity that is already online.
“The prices at the pump are being driven by a global shortage of refining capacity,” wrote Rounds. “Americans feel the impact of this refining bottleneck every time they fill up at the pump, but farmers can’t stop their tractors and combines in the middle of harvest, and truckers can’t quit running their routes. We need to act now to bring down the price of diesel. The solution is one that you have promoted since your first Administration: unleash American energy dominance.”
“Broader regulatory changes will of course take time. What we can and should do right now is explore suspending the federal gas tax through the end of the year to give Americans immediate relief,” continued Rounds. “The federal gas tax is 24.4 cents per gallon on diesel fuel and 18.4 cents per gallon on gasoline…Those savings would make a huge difference for the American people.”
Read the full text of the letter HERE or below.
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Dear President Trump:
I write to urge you to use your authority under the Defense Production Act to help domestic refineries expand their capacity. Democrats are telling the American people that the conflict with Iran is the sole cause of high fuel costs and that, if the conflict ended today, fuel prices would magically plummet tomorrow. As you know, that is false. Oil is flowing through the Strait of Hormuz. The prices at the pump are being driven by a global shortage of refining capacity—a weakness in the global fuel supply chain that we should start addressing here at home.
Severe refining deficits across Russia and the Middle East have left the United States and China as the last major refining powers standing. Americans feel the impact of this refining bottleneck every time they fill up at the pump, but farmers can’t stop their tractors and combines in the middle of harvest, and truckers can’t quit running their routes. We need to act now to bring down the price of diesel. The solution is one that you have promoted since your first Administration: unleash American energy dominance. In this case, that means invoking the Defense Production Act to expand domestic refining capacity.
Your authority under the Defense Production Act is tied to national defense, which Congress defined to include “programs” for “energy production or construction.” The Act authorizes you to prioritize contracts relating to “materials, equipment, and services” in order to “expand . . . refining” and to “provide for the modification or expansion of privately owned facilities.” You also have the authority to incentivize domestic refinery expansion through loans and loan guarantees, subsidy payments, and purchase commitments. Together, these authorities can be wielded as powerful tools to expand refining capacity, including refining capacity that is already online. We won’t see the results overnight, but the sooner we start, the better.
More broadly, we need to ease permitting requirements and cut through the other bureaucratic red tape obstructing American fuel production. As we clear these regulatory logjams, we also need to confront the bigger question of why no new major refinery has opened in the United States since the 1970s. Oil and gas companies are understandably hesitant to invest billions in new refineries when a change in the political winds could spell disaster. After all, onerous regulations and high compliance costs in California, a notoriously oil-and-gas-unfriendly state, recently forced two refineries to close. We need laws and policies that give oil and gas companies confidence to invest in large-scale refineries here at home, not regulations that stifle the industry.
These broader regulatory changes will of course take time. What we can and should do right now is explore suspending the federal gas tax through the end of the year to give Americans immediate relief. The federal gas tax is 24.4 cents per gallon on diesel fuel and 18.4 cents per gallon on gasoline. To offset the loss of revenue to the Highway Trust Fund, Congress can consider authorizing a one-time transfer from the General Fund. I also strongly encourage States to consider suspending, or at the very least reducing, their own gas taxes. The average State gas tax is 35.5 cents per gallon on diesel fuel and 33.3 cents per gallon on gasoline. Suspending both federal and State gas taxes would amount to an average savings of 60 cents per gallon on diesel fuel and 52 cents per gallon on gasoline. Those savings would make a huge difference for the American people.
Please let me know how I can be of assistance. I greatly appreciate your consideration.
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The Republicans are in a cruddy spot, as Trump unilaterally declared this war (conflict, excursion, as the president has said?), and die hards won’t rein him in. The suspension of the gas tax is a better idea than a self-imposed embargo. Honestly, I suspect it is too late to do much of anything. The election will happen, the numbers look pretty bad for Republicans, the chips will fall where they fall. It’s clear from the past 50 years that no one party has a monopoly on success.
Quick, an election is taking place, make it look like I’m doing something.
Right out of the liberal playbook in 2023!
I would’ve said President biden but he doesn’t remember 2022/23..
RLTW
Yes, continue spending your retirement well by blaming liberals for everything lol
RLTW
I have plenty to spend!
Maybe you should’ve invested instead of planning on the government to support you.
RLTW
Steve, are you okay? Seriously asking. You seem to have a lot of anger.
Window into the mind of the boomer conservative… the scary part? This is a common sentiment.
Being afflicted with Fox Brain is a terrible thing.
Obviously writing strongly worded letters is straight out of the Republican playbook. How many strongly worded letters need to be written by Republicans who control the Presidency, the House and the Senate? They control the whole structure and yet can accomplish nothing important for average Americans.
Please tell me what the price of diesel was in 2022/23. It sure as hell was not $6.38. The historic price of diesel is on Trump and Republican shoulders.
This is dumb and Rounds knows it. Glad that Dusty has stuck to his guns and continued to say this is an idiotic policy.
Let’s just continue to be communist sympathisers and kiss Putin’s ass and buy more Russian oil and piss on Ukraine.
We are now funding the deaths of our own soldiers. Russia is helping Iran. This is lunacy. He used buying Russian oil as a reason to impose tariffs on countries. Senile old Don is nothing more than a conman.
Why not Bengs. What has Rounds done for you.
the less the government does “for” us the better off we are
There is now a video of Byron Donalds being harangued at an event by a grandmother who hasn’t seen her grandchild since August 7th because she refused to babysit, because she had other plans. And she wants to know what the state of Florida is going to do about that.
i am wondering what personal problem you have that Mike Rounds hasn’t addressed.
I am a vet who has had issues with the VA a few times. Every time I had one, Rounds’ office helped. Every single time I asked, they were there. His office has done more for me than any other legislator this state has ever had. Does that help?
Least he could do considering he’s a pro war traitor, willing to sacrifice you for his rich buddies. how does that help you?
He was the Governor during my terms of service, so I’m not really sure these dots are connecting the way you’d like.
Republicans demand to know who did this to us!
Who could it possibly be?
Imagine if Biden or Obama did something so foolish.
Another Republican mess. The voters are again tired of it. We go back to the other team for awhile, barely long enough to clean it up. Rinse and repeat.
This is populist nonsense, and Mike should know better.
perhaps we should be asking why taxes on energy products are so high?
When Biden wanted to suspend the tax it was called a gimmick. But now the other team wants to do it so it’s a serious policy consideration? GTFO with that. Rubber Stamp Rounds needs to retire.
“Severe refining deficits across Russia and the Middle East”
Is there perhaps anything happening in those two regions that could cause this?
The senator has argued in favor of the war with Iran and has refused to condemn the tariffs that have caused such trade and price issues. Why not address the causes of high energy prices? Tax holidays are gimmicks. Please address the cause of high gas and diesel prices, Senator!
yes, energy costs a lot.
It’s too bad the world needs anything from Iran or Russia
I wonder how the USA could fix that?
Thousands of South Dakotans (and millions of Americans) will be harvesting crops laying the highest prices for diesel ever because of a war of choice by President Dunce. Blame him, Mike. And Blame yourself, and your partner in crime, John Thune.
Wait, so are we in a war or not?