The BLUF - May 12th

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This is Atlas, and you’re reading the Bottom Line Up Front, where we cover the top geopolitical stories from around the world every Tuesday!

Today’s topics:

• Trump Floats Suspension Of Federal Gas Tax

• CA Mayor Pleads Guilty To DOJ Charge Of Being A Chinese Foreign Agent

• Supreme Court Voids Lower Court Ruling For Alabama Congressional Map

Trump Floats Suspension Of Federal Gas Tax

_{By: Atlas}

President Donald Trump said Monday he supports suspending the federal gasoline tax, an acknowledgment that the war in Iran is unlikely to end soon enough to give American drivers near-term relief at the pump.

"I think it's a great idea," Trump told CBS News in a phone interview. "Yup, we're going to take off the gas tax for a period of time, and when gas goes down, we'll let it phase back in."

Speaking to reporters later in the Oval Office during an event on maternal health care, the president was asked how long he intended to halt the levy. "Until it's appropriate," he said. "It's a small percentage, but it's, you know, it's still money. As soon as this is over with Iran, as soon as it's over, you're going to see gasoline and oil drop like a rock."

The national average for a gallon of regular gasoline stood at $4.52 Monday, according to AAA, roughly 50 percent above where it stood when the war with Iran began on Feb. 28. The federal tax is 18.4 cents a gallon for gasoline and 24.4 cents for diesel — figures last reset by the 1993 tax bill signed by President Bill Clinton and unchanged since.

What suspension would do — and what it requires

Trump cannot suspend the federal gas tax on his own. The levy is established by statute and any pause would require an act of Congress. No Congress has ever passed one.

The federal tax is collected at the refinery or terminal level, not at the pump. That structure means analysts cannot guarantee the savings would flow through to drivers. The Bipartisan Policy Center estimated last month that consumers would likely see 10 to 16 cents of relief per gallon if the full 18.4-cent tax were paused, with gasoline suppliers capturing the remainder. The Congressional Research Service has noted that enforcement of pass-through pricing would be administratively difficult, given that retail gas prices depend on crude prices, regional refining capacity, ethanol blends, transportation costs, and local taxes that vary widely from state to state.

The fiscal cost is also real. The federal gas tax generates roughly $23 billion a year in revenue for the Highway Trust Fund, which underwrites federal highway construction, road maintenance, and public transit. The fund has already been spending faster than it has been collecting, and the Congressional Budget Office projects it will run out of money by 2028. A five-month suspension would punch a roughly $17 billion hole in the fund, by the Bipartisan Policy Center's estimate.

For an average 16-gallon fill-up, the full 18.4-cent break translates to about $3 in savings — a figure Trump himself acknowledged was modest. "It's a small percentage, but it's, you know, it's still money," he repeated to reporters.

A bipartisan path on the Hill, but no clear majority yet

The legislative response built quickly through Monday afternoon. Sen. Josh Hawley, R-Mo., posted on X that he would introduce a bill suspending the federal tax on gasoline and diesel for 90 days, with authority for the president to extend it for another 90. "American workers and families deserve immediate relief and this legislation will do just that," he said.

Rep. Anna Paulina Luna, R-Fla., said she would introduce a companion measure in the House "in light of Trump's recent remarks." Rep. Jeff Van Drew, R-N.J., signaled he would do the same.

The Democratic side already had legislation on the table. Sens. Mark Kelly, D-Ariz., and Richard Blumenthal, D-Conn., introduced the Gas Prices Relief Act in March, proposing a suspension through Oct. 1 with general-fund offsets to backstop the Highway Trust Fund. A companion bill in the House was sponsored by Rep. Chris Pappas, D-N.H. The bills had not moved before Trump's comments. Pappas posted Monday: "This should have happened months ago. Let's pass it this week."

Senate Majority Leader John Thune, R-S.D., was noncommittal. "I've not in the past obviously been a fan of that idea. But you know I've got some colleagues out there who think it's a good idea and so we'll hear them out," he told reporters. Thune said his preferred path was reopening the Strait of Hormuz to commercial traffic. "Obviously, any time that you suspend the gas tax, that leaves a big hole in the Highway Trust Fund, which also has implications down the road."

Sen. John Cornyn, R-Texas, who is in a runoff race later this month, said he could "live with" a temporary suspension while opposing a permanent one. Sen. Rand Paul, R-Ky., offered a sharper response: "Instead of suspending the tax, we should suspend the war."

Energy Secretary Chris Wright signaled the administration's openness on NBC's Meet the Press on Sunday. "All measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of," he said. Wright also said the administration had asked U.S. refiners to shorten spring maintenance windows in order to keep more product flowing.

State-level moves and the broader pressure on prices

A handful of states have already moved. Georgia suspended its 33-cent-per-gallon tax for 60 days; that pause expires May 19. Indiana halted its 36-cent-per-gallon excise tax for 30 days. Kentucky and Utah reduced their state levies. Several other states are weighing similar action.

The federal administration has cycled through most of the conventional tools available to a White House facing an oil supply shock. The U.S. and allied governments have released roughly 172 million barrels of crude from the Strategic Petroleum Reserve since the war began. Washington has temporarily lifted sanctions on Russian and Iranian crude already at sea, eased federal regulations on summer-blend gasoline to boost refining throughput, and lifted Jones Act restrictions on coastal fuel shipments.

Trump's "Project Freedom" — the Navy-escorted operation to guide commercial vessels through the Strait of Hormuz — was paused weeks ago after objections from Gulf partners. The president told CBS he could resume it. "We would have had it open under Operation Freedom, but we can easily go back to that." Asked whether the operation would restart, he replied, "I don't know — either that, or much more severe."

West Texas Intermediate crude was trading at about $98 a barrel Monday, up roughly 70 percent on the year. Brent crude remained above $100 in overseas trade. Crude accounts for about half the retail price of gasoline, which is why the pump number has stayed above $4.50 despite the SPR releases and sanctions waivers.

The political backdrop

The economic pressure is feeding into political pressure. The University of Michigan's May consumer sentiment index fell to an all-time low, with director Joanne Hsu attributing the drop primarily to pump prices. "Consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump," she said. "Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall."

A Washington Post-ABC News-Ipsos poll conducted in late April found that nearly two-thirds of Americans disapprove of Trump's handling of the economy — the highest disapproval mark of either of his terms. A separate NPR/Marist poll showed 62 percent of registered voters assigning the president a "great deal" or "good amount" of blame for the gas price increases.

Memorial Day road travel is projected to rise even with prices elevated, and the November midterm elections are roughly six months away. That timeline is part of why members of both parties — for very different political reasons — have suddenly found common ground on at least the framing of the question.

Trump himself rejected the idea Monday that any of this represented strategic difficulty. "There's no pressure at all," he told reporters. "We're going to have a complete victory."

Whether Congress agrees to give him the suspension, and whether refiners pass any savings on to drivers if it does, are the two questions that will determine whether the proposal turns into anything more than a talking point. The Highway Trust Fund's longer-term solvency is the third. None of those answers is likely to come before the Iran war does.

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