Treasury Secretary Janet Yellen says a federal gas tax holiday is 'certainly worth considering'

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Treasury Secretary Janet Yellen testifies during a House Financial Services Committee on May, 12 2022.
Treasury Secretary Janet Yellen.Graeme Jennings - Pool/Getty Images
  • Treasury Secretary Janet Yellen said a federal gas tax holiday was "certainly worth considering."

  • She made the comments on ABC's "This Week," where she spoke about the state of the economy.

  • Yellen said inflation was "unacceptably high," but argued that a recession was not "inevitable."

Treasury Secretary Janet Yellen on Sunday expressed an openness to a federal gas tax holiday as motorists continue to bear the brunt of high fuel costs.

During an interview on ABC's "This Week," the former Federal Reserve chair told host George Stephanopoulos that the proposal is worth considering by the Biden administration, especially as she spoke of inflation in the U.S. being "unacceptably high."

"President Biden wants to do anything he possibly can to help consumers," she said. "Gas prices have risen a great deal and it's clearly burdening households, so he stands ready to work with Congress and that's an idea that's certainly worth considering."

As of Sunday, the price of gas is averaging slightly under $5 a gallon, and many lawmakers — including a growing number of Democrats — are looking into the suspension of the federal gas tax as a way to provide relief to consumers.

In the interview, Yellen also brushed off talk that a recession is "inevitable."

Since the beginning of the year, unemployment has remained low and wages have risen, although not nearly enough to counter the effects of inflation among American consumers.

"It's President Biden's top priority to bring it down and chair [Jerome] Powell has said that his goal is to bring inflation down while maintaining a strong labor market," she said. "That's going to take skill and luck, but, I believe it's possible — I don't think a recession is inevitable."

A gas tax holiday would require congressional approval, but Biden could prod more Democrats to support the bill if he throws his weight behind the idea.

Last week, Democratic Rep. Earl Blumenauer of Oregon wrote a letter to Biden asking that he reject a suspension of the gas tax, arguing that it "would blow a massive hole in the federal transportation and infrastructure budget."

The congressman said that even a temporary reduction in the federal gas tax would hurt projects tied into the $1.2 trillion bipartisan infrastructure bill, which was signed into law last year.

Several states — including Georgia, Maryland, and New York — already have enacted state gas tax holidays.

Read the original article on Business Insider