What a gas tax exemption would mean for Americans

With gasoline prices hovering around $5 a gallon, President Biden on Wednesday called on Congress to suspend the federal gasoline tax for 90 days. He also called on states to suspend their gasoline taxes and pushed back against his Republican critics who blame him for soaring prices.

  • Plus: a new solution to the housing crisis for Native Americans.
  • And: Juul e-cigarettes may soon be banned in the United States

Guests: Hans Nichols and Russell Contreras of Axios.

Credits: Axios Today is produced by Niala Boodhoo, Sara Kehaulani Goo, Alexandra Botti, Nuria Marquez Martinez, Lydia McMullen-Laird and Alex Sugiura. The music is composed by Evan Viola. You can reach us at [email protected]. You can send questions, comments, and story ideas to Niala in text or voice memo form at 202-918-4893.

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NIALA: Hello! Welcome to Axios today! Today is Thursday, June 23. I am Niala Boodhoo. Here’s what we’re covering today: A new solution to the housing crisis for Native Americans. Additionally, juul e-cigarettes may soon be banned in the United States. Actually average for prices at the pump.

NIALA: With gasoline prices hovering around $5 a gallon across the country, President Biden on Wednesday called on Congress to suspend the federal gasoline tax for 90 days. Biden also called on states to suspend their gasoline taxes…and he pushed back against Republican critics who blame him for soaring prices. Hans Nichols now joins us with a reality check. Hi Hans.

HANS NICHOLS: Hello.

NIALA: So Hans is saying that this federal tax exemption is taking place, does that mean consumers are automatically paying lower prices at the pump?

HANS: Economists will tell you no. Economists will say that in the short term, all that 18 cents, 24 cents for diesel will go to the oil and gas producers, the refiners. Now, somewhere on a time horizon, the money should in theory go back to the consumers, to the taxpayers, to the people who are at the pumps. It’s unclear when that will happen, but likely outside the three-month window.

And that’s why, you know, economists, Democratic economists, ex-Obama economists – That’s why they’re pretty uniformly negative on this proposition because they don’t think the savings will actually pass through to consumers who line up and fill their Tank. Now Biden is pushing hard on this. He says, you know, he expects the oil companies to pass this on, but let’s be clear. Joe Biden can’t do much to force the oil companies. And there’s really no way to judge or even like, tabulate, or calculate for Biden to make sure it actually gets through to consumers.

NIALA: What the president can do is use a sort of bully pulpit, which we saw yesterday, Hans, because he talked about how prices are expected to drop further at the pumps and that gas station operators should lower prices further. How useful is this public pressure for the Biden administration to drive home the message that prices for looks shouldn’t be as high as they are right now?

HANS: Well, it helps them make their case. It helps the Biden administration argue that oil and gas companies are to blame. What the oil and gas companies are saying is that oil prices are at historic highs and we are already producing and refining at full capacity. We can’t do anything more. And so Niala, you have this dynamic where Biden seems ready to criticize, to upset, almost to fight with the only group in a part of the industry that can really solve his problem. And that’s the oil and gas industry. Now there is another option and that is plan B and that is to go and convince the Saudis to pump more oil. And it is the other main policy lever available to any president in the face of historically high oil prices.

NIALA: He was also very clear in that speech about blaming Vladimir Putin and his invasion of Ukraine.

PRESIDENT BIDEN: Are you saying that we were wrong to support Ukraine? Are you saying we were wrong to stand up to Putin? Are you saying we would prefer lower gas prices in the United States and Putin’s iron fist in Europe? I do not believe that.

NIALA: Hans, to what extent was this announcement an opportunity to respond to these criticisms?

HANS: It was definitely a factor, wasn’t it? I mean, the White House is thinking, given this really since January, February and the polls on this kind of indicate that they had to be seen as taking action even though you know, it’s not going to be terribly successful. The line I heard was that you wanted to get caught trying. Whether or not that will bring prices down, you know, who knows if it actually will because oil markets, international oil markets are so complicated and there are so many other push and pull factors at play , but it’s clear the White House wants to get caught trying.

NIALA: Hans Nichols covers the Biden administration for Axios. Thanks Hans.

HANS: Thanks for inviting me.

NIALA: In a moment, a new approach to housing for Indigenous communities in South Dakota. Welcome to Axios Today I am Niala Boodhoo. In South Dakota, indigenous communities have struggled with housing for decades. Many Native Americans on reservations and in nearby urban enclaves live in dilapidated, overcrowded structures with no electricity or indoor plumbing. Now, a community development group is trying something new to change that: going back to Oglala Lakota traditions. Here with the story is Axios justice and race reporter Russell Contreras – Russ, I think we need to start by simply understanding the history of housing as it relates to Native Americans, and why there are so many issues today.

RUSSELL CONTRERAS: We have to remember that when indigenous people were put on reserves, many of them were not allowed to apply for home loans and mortgages on reserve lands or in urban settings. Under the treaties, the federal government was supposed to provide housing and basic services to native people. This does not happen. So when we, if we move forward today, not only is there a housing shortage, but there’s a lack of services that allow native people to apply for mortgages, to go to banks, to do whatever that anyone can do.

NIALA: So Russ, that explains why we say that some Native Americans, indigenous communities have homes in this country where they don’t have electricity or indoor plumbing.

RUS: That’s true. They are located in isolated areas. There is not that, water, sewage structures. Not only that, I mean, if you look at the Navajo Nation or Lakota, those homes are way out in those isolated areas and it’s hard to get repairs.

NIALA: Different people worked on this, including the Thunder Valley Community Development Corporation. How are they trying to solve this problem?

NIALA: They had the idea that if you teach, for example, credit or financial literacy, and you talk about building a sustainable housing structure, you can fight poverty that way. So what this company did is asked, uh, the native tribesmen told them that you, we can put you through financial education classes, we can basically show you how to apply for a loan, fix the credit and so on, then buy a house either on their development or elsewhere. Thunder Valley is really interesting because they have to develop these ecologically sustainable houses, and they do it in a Lakota tradition. So instead of block by block, they do it in circles like you would back in the days when they were nomads and put out, say a teepee, these are very culturally relevant structures. He talks about their heritage. Plus, they teach you how to apply for a house and get something on your own. It’s very unique. And many native tribes are watching Thunder Valley to see how successful they will be.

NIALA: How successful was it? How many people could they accommodate?

RUSS: Well, since they’re still starting, only a handful of people have bought houses. But the pandemic has also put a pause on some of their programs. They couldn’t come and take the financial literacy classes, uh, do it, uh, online as a challenge because there’s not a lot of broadband. But they also do other things, in addition to teaching the members of the tribe, the Lakota language, and especially to transmit it to the younger generations. These programs are therefore designed to be culturally relevant to these populations.

NIALA: Russell Contreras, Axios Race and Justice Reporter. Thanks Russell.

RUSS: Thanks for inviting me.

NIALA: Before you go — cigarettes AND e-cigarettes made headlines this week as the target of two major regulatory moves by the Biden administration. The FDA on Tuesday proposed a new rule that would reduce the amount of nicotine in cigarettes sold in the United States, to bring it down to non-addictive levels. In the proposed rule, regulators said the cap on nicotine would make cigarettes and other tobacco products less appealing to young people. It is unclear how and when this might come into effect.

The FDA is also preparing to order vaping company Juul Labs to remove its e-cigarettes from the US market, according to a report in the Wall Street Journal yesterday. The announcement is expected this week. This follows a nearly two-year review by the FDA of the company’s data amid growing concerns about the company’s role in snagging young users. But Juul lost popularity among high schoolers after the FDA banned its flavored pods. The FDA, however, has not banned flavored disposable e-cigarettes from other brands that are still popular among teens.

That’s all we have for you today! You can join our podcast team at axios dot com or you can message me directly on twitter. You can also text me at (202) 918-4893.

I’m Niala Boodhoo – thanks for listening – stay safe and we’ll see you here tomorrow morning.

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Whether you’re trying to save money at the gas station or negotiating salaries, Money Rehab is here to help thanks to its host: award-winning financial journalist and former CNBC anchor Nicole Lapin [pronounced Lap-pin].

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