Stimulus Update: Could Americans Soon See Relief From High Gas Prices?
- Gas prices have hit recent record highs.
- There are proposals to provide gas rebates but they're likely going nowhere.
- President Biden is thinking of offering financial relief in a different form.
The next stimulus could look different from the last ones.
The average price of gas has been hovering around $5 a gallon in the past weeks, which is a recent record. Unsurprisingly, many Americans are struggling and lawmakers are looking at ways to provide relief -- including several proposals that have been put forth that would provide money directly into people's bank accounts to help cope with rising costs.
It is unlikely that any plan to offer direct payments via deposit or check will be able to pass a divided Congress, though. But financial relief could still be coming.
This next type of stimulus aid could take a very different form compared with the payments that were sent out during the past couple years. But it could still make a big difference in people's lives.
Will Americans get help covering gas costs?
According to multiple reports, the Biden administration is considering taking unprecedented action to help people cope with rising fuel costs. Two of the possible plans include:
- Gas rebate cards
- A gas tax holiday
Gas rebate cards would be more similar to the past stimulus plans in that Americans would directly receive money from the government. But there are logistical issues, including the fact that a shortage of microchips would make it difficult to produce a sufficient number of cards for everyone who qualifies for them.
The gas tax holiday, on the other hand, stands a greater chance of happening. This would involve simply suspending the collection of the federal gas tax temporarily. This would end up saving people around 18.4 cents per gallon of gas, which could make a huge difference in many people's budgets.
While a suspension of a tax may not sound much like stimulus relief, the fact is that the last three payments were simply considered advances on tax credits and there's not a huge practical difference between getting back money from the IRS and not having to pay out money to the federal government in the first place.
How likely is a gas tax holiday?
A gas tax holiday is more likely to occur than most other proposed stimulus relief in large part because the Biden administration does not need buy-in from Congress in order to suspend the collection of federal gas taxes. President Biden has also confirmed that this proposal is on the table and has indicated he hopes to have a decision "based on the data" soon.
Americans who are having a hard time affording high gas prices or who are otherwise continuing to face economic challenges linked to the pandemic should keep their eyes on D.C. as relief could actually, finally, soon be coming after lots of false starts at providing additional assistance.
Our picks for 2024's best credit cards
Our experts carefully review the most popular offers and select those that are worthy of a spot in your wallet. These standout cards come with fantastic benefits like generous sign-up bonuses, long 0% intro APR periods, and robust rewards.
Click here to learn more about our recommended credit cards
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2024 The Ascent. All rights reserved.