Illustration: Sarah Grillo/Axios
The White House considered giving Americans gas cards to help offset high prices, but faced strong opposition from congressional committees, which questioned the plan's viability and effectiveness.
Why it matters: The Biden administration is feeling political pressure from high energy costs, made worse by Western sanctions against Russia, and Democrats desperately want to offer some kind of policy response.
What we're watching: The White House this week considered having the IRS send gas cards to Americans — a short-lived idea that some key House Democrats vehemently opposed.
- The idea came up as part of a broader package to address gas prices, which is still in its early stages, a senior Democratic aide told Axios.
A House Democratic counsel on Wednesday laid out for the White House a list of reasons why gas cards would be a bad idea, including:
- It would be expensive and poorly targeted.
- It could worsen inflation and wouldn't do much to lower costs.
- Delivering the cards would be a slow process that could bog down the IRS in the middle of the filing season, potentially delaying people's tax returns.
What they're saying: “There’s a variety of ideas being discussed to ensure that the costs American families are feeling at the pump are as minimal as possible," White House spokesperson Vedant Patel told Axios.
- "However, gas cards being sent to the American people is not seriously under consideration. It is not an administratively feasible solution and the Biden administration is not considering this as a serious option to help American families," Patel said.
The big picture: Democrats in both chambers have been brainstorming ideas on legislation to lower gas prices after they reached record high levels last week.
- Other ideas being discussed include stimulus checks, using more ethanol to lower the demand for oil, and canceling oil companies' federal leases that aren't actively being used, the senior Democratic aide told Axios.
- Various Democrats have also already introduced bills that would suspend the federal gas tax; raise taxes on oil companies to fund means-tested assistance, or provide a federal rebate whenever gas prices get above $4 per gallon.
The bottom line: Fed chair Jerome Powell forecasts high inflation through the middle of the year — so gas prices will remain an issue in midterm campaigns.