White House Eyes Gas Tax Holiday

By Yuval Rosenberg

Good evening! It’s February 15, when pitchers and
catchers were supposed to be reporting to spring training. Instead,
Major League Baseball and its players remain locked in a dreary
labor dispute, robbing fans of a moment of optimism and hope
signaling the coming of spring. 😢

While we wait for signs of progress there, here’s what
else is happening.

White House Eyes Gas Tax Holiday: Report

Officials in the Biden administration are debating the merits of
suspending the federal fuel tax, The Washington Post’s Tony Romm
and Jeff Stein
report.

A group of Democratic senators announced their support last week
for a bill that would suspend the federal tax of 18.4 cents per
gallon of gasoline for the remainder of 2022, and White House
officials are considering backing the plan as a way to provide
relief for households facing a wave of inflation that is more
powerful and more persistent than expected — a serious political
threat in an election year.

At a lunch meeting Tuesday, Senate Democrats discussed the
proposal. Sen. Tammy Duckworth (D-IL) said the lawmakers seemed to
"really like” the idea of lowering taxes on gas or other
essentials. Majority Leader Chuck Schumer (D-NY) told reporters
that he expects to take concrete steps soon. “We are focused on
getting costs down and you’re going to see a lot of activity in
March from us on that issue,” he said.

But the White House isn’t sold on the plan yet — and there are
real concerns about the idea. Officials worry that the tax holiday
might end up padding the profits of fuel companies more than
helping consumers, and it could be difficult to reinstate the tax
somewhere down the road.

The plan also faces opposition in Congress. Democratic Sen. Joe
Manchin (WV) said he was concerned about the effect a tax holiday
would have on funding for highway construction and repair. “People
want their bridges and their roads, and we have an infrastructure
bill we just passed this summer, and they want to take that all
away," he told reporters. “It just doesn’t make sense.”

And Republican Sen. John Thune (SD) described the proposal as “a
desperate cry for help. I think they realize that they’re on the
wrong side of the energy issue, the wrong side of the inflation
issue.”

Former Treasury Secretary Larry Summers, who has been critical
of Democrats’ approach to spending and inflation, said that the gas
tax holiday was “short-sighted, ineffective, goofy and
gimmicky.”

“It’s terrible policy at a moment we’ve labeled climate change
as an existential threat,” Summers said.

Republicans Slow Stopgap Spending Bill With Shutdown Days
Away

The Senate faces a Friday deadline to pass a short-term
extension of federal funding, and while leaders of both parties
sounded optimistic that they’ll get it done and avoid a government
shutdown, a number of Republicans are threatening to complicate the
process, insisting that they won’t agree to ease passage of the
bill unless they get a vote on an amendment to defund enforcement
of President Joe Biden’s vaccine mandates.

How we got here: The House last week passed a stopgap
funding bill, known as a continuing resolution, to keep agencies
running for three weeks beyond the February 18 deadline, when
current funding expires. Now it’s the Senate’s turn. But as first
reported by
Fox News, six Republicans led by Sen. Mike Lee of
Utah sent a letter to colleagues Monday saying they won’t allow
speedy passage of the funding bill unless the Senate also votes on
an amendment to block enforcement of the mandates. The Biden
administration’s mandates for health care workers and military
members are in effect, but its efforts to require vaccination for
other groups, including employees of large private companies, have
been withdrawn or blocked by legal challenges.

Lee and other GOP senators made a similar demand before the
Senate considered the previous funding stopgap in December. They
got a vote on the anti-mandate amendment, which failed, 48-50, with
two Republicans absent. But if Democrats agree to another amendment
vote, the Senate math may be different this time because Democratic
Sen. Ben Ray Luján of New Mexico is still out recovering from a
stroke.

The GOP anti-mandate push follows Sen. Marsha Blackburn’s (R-TN)
announcement last week that she put a hold on the spending bill
over her concerns that a $30 million Health and Human Services
Department harm reduction grant program would fund the purchase of
crack pipes for drug users. The Biden administration has denied
that claim, and independent fact checkers have determined it to be
false.

Party leaders remain hopeful: Senate Majority Leader
Chuck Schumer (D-NY) said Tuesday that he’s “optimistic” that
appropriators will keep working toward a full-year spending deal,
which he said “is a thousand times better than relying on CRs,
continuing resolutions, to lurch from one short-term extension to
the next.” But, he said, while those talks proceed, Republicans and
Democrats should “avoid even a hint of a government shutdown” by
making sure that the short-term funding extension passes this week.
“No one, and certainly not my Republican colleagues, wants a
Republican government shutdown, so I’m hopeful they will cooperate
with us to pass this necessary CR, which every single Democrat
wants to happen and will cooperate to make sure that it happens,”
Schumer said.

Senate Minority Leader Mitch McConnell insisted Tuesday that a
shutdown isn’t in the works. “As is often the case, we’ll process a
few amendments before doing a short-term [continuing resolution],”
McConnell told reporters Tuesday. “I think it’ll all be worked out.
There’s no danger of a government shutdown."

Health and Human Services Needs $30 Billion More for Covid
Efforts: Becerra

Health and Human Services Secretary Xavier Becerra told
lawmakers Tuesday that his department needs at least $30 billion in
order to maintain its ongoing response to the Covid-19
pandemic.

Becerra was on Capitol Hill talking to congressional
appropriators who are writing a supplemental pandemic package that
is expected to accompany the omnibus funding bill for fiscal year
2022. A department spokesperson told
Politico that the secretary discussed with
lawmakers “the need for additional resources to support securing
more life-saving treatments and vaccines, sustaining testing
capacity, and investing in research and development of
next-generation vaccines.”

The Biden administration has warned that Covid funds are running
low, which could make it hard for the federal government to respond
to a new coronavirus variant, should one arise.

Although some lawmakers are expected to resist a request for
additional funding, arguing that there is plenty of money left over
from previous appropriations, Sen. Roy Blunt (R-MO) said that he is
satisfied that most of the money has been put to use. “We asked
some questions — Senator Burr and I a few weeks ago — about how the
other money had been spent,” he said. “And, frankly, the categories
where they’re asking for money, the money has all been spent or
committed to the purposes it had been appropriated.”

January Budget Surplus Not Quite What It Seems: Report

We told you last week about the $119 billion federal budget
surplus in January, the first monthly surplus in more than two
years. Politico’s
Morning Money highlighted the surplus on Monday,
saying it was “another reflection of an economy that is firing on
all cylinders, and improving the fiscal picture at the same time.”
But the Committee for a Responsible Federal Budget, which advocates
for deficit reduction, pushed back on that characterization,
arguing that the January surplus isn’t quite what it seems.

“It’s good news about the deficit coming down and a monthly
surplus in January,” CRFB’s Maya MacGuineas
told Morning Money, “but it’s important to keep in
mind that 1) much of the monthly surplus was due to timing shifts
and one-time events; 2) even while the deficit is coming down—which
was expected after the Covid emergency improved—the debt is still
growing at a hefty clip, and is projected to grow by over $1
trillion this year; and 3) the longer-term debt is projected to
grow by $13 trillion over the next decade assuming no new
borrowing.”

According to CRFB, the January surplus was “largely a mirage,”
totaling a more modest $14 billion once one-time revenues and
timing shifts of payments due to weekends and holidays are removed
from the tally. Overall debt levels will remain at historically
high levels, driven by structural factors including an aging
population and rising health care costs. “So we are far off from a
fiscal victory,” MacGuineas said.

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