Congressional Update: Russia/Ukraine Crisis; Gas Tax Holiday? State Of The Union
Last week, Washington quickly turned its focus towards Russia’s invasion of Ukraine, which sent oil prices soaring over $100/barrel.
Retaliatory sanctions announced by President Biden on Thursday did not target Russia’s energy sector, reportedly at the request of European allies, including Germany and Italy, who are worried about potential effects on their own economies.
More broadly, Western economies are concerned that the harshest sanctions on Russia could cause a catastrophic energy shortage crisis that would drive up already climbing prices.
However, the US and Europe could still enact these sanctions as the conflict worsens – particularly as Russian forces encroach on Ukraine’s capital, Kyiv.
In his speech on Thursday, President Biden said he would take all necessary steps to ensure gas price stability for American consumers, which could include a release from the Strategic Petroleum Reserve.
Gas Tax Holiday
A different White House idea to lower prices, a temporary “gas tax holiday,” continues to be a nonstarter for most Republicans and many Democrats.
Trade associations representing railroad and trucking industries have lobbied hard against such a proposal, arguing it would deprive the Highway Trust Fund of vital revenue on which the Bipartisan Infrastructure Law depends.
Rep. Garret Graves (R-LA), Republican leader of the House Select Committee on the Climate Crisis, called a gas tax holiday a “gimmick” and said it would raise prices of “oil and gas, of electricity, of natural gas, everything is going to go up.”
State Of The Union
Congress returns to session next week, where the focus will be on President Biden’s State of the Union address (March 1), Ukraine, and President Biden’s nominee for the Supreme Court, which reportedly will be Ketanji Brown Jackson.
During the State of the Union address, President Biden is expected to make a forceful case for passing certain portions of the stalled Build Back Better Act (BBB). Congress must also quickly negotiate a Fiscal Year (FY) 2022 spending package.
As a reminder, the Continuing Resolution – which expires March 11 — continues existing government funding at FY 2021 levels.
It is critical that Congress pass an FY 2022 package to fully fund portions of the Bipartisan Infrastructure Law.
Also last week, Senators Dianne Feinstein (D-CA) and Pat Toomey (R-PA) called on the Senate Environment and Public Works Committee to consider legislation to end the Renewable Fuel Standard’s corn ethanol mandate.
The Senators argued that the mandate was originally included to cut emissions and support farmers, but is now counterproductive.