The rate of inflation grew in February by nearly 8% in the last year, with prices for everything from gasoline to bread, milk, and eggs soaring.
The consumer price index increased 7.9% over the past 12 months, hitting a 40-year high, according to the Labor Department’s Bureau of Labor Statistics. “The February acceleration was the fastest pace since January 1982, back when the U.S. economy confronted the twin threat of higher inflation and reduced economic growth,” CNBC reported.
Meanwhile, earnings fell again, according to BLS data. “Real inflation-adjusted average hourly earnings for the month fell 0.8% in February, contributing to a 2.6% decline over the past year, according to the BLS. That came even though headline earnings rose 5.1% from a year ago, but were outweighed by the price surge,” the network reported.
The news comes as some begin to push for the suspension of federal and state taxes on gasoline.
Dubbed a “gas tax holiday,” ABC News reported “an increasing number of governors and state lawmakers are calling for the suspension of gas taxes to provide relief to motorists who are facing the prospect of even higher pump prices as the country cuts off Russian oil imports.” The outlet added:
Republican legislative leaders in Michigan and Pennsylvania announced proposals Wednesday to suspend or reduce state gas taxes. That came after the Republican governor of Georgia and Democratic governor of California both called for relief from state gas taxes Tuesday, when President Joe Biden ordered a ban on Russian oil imports.
Meanwhile, the Democratic governors of Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin sent a joint letter to congressional leaders urging them to support legislation suspending the federal government’s 18.4-cent-a-gallon gas tax through 2022.
Calls to suspend gas taxes are also growing on Capitol Hill. Bills are pending in both the House and Senate to create a gas-tax holiday, with each planning to offset lost revenue by using general fund money to fund state highway and public transit programs.
Yet there’s no guarantee that doing away with gas taxes will actually help Americans.
“On average, only about one-third of the value of previous gas tax cuts or tax increases were passed on to consumers, according to a 2020 report from the American Road & Transportation Builders Association that analyzed 113 state gas tax changes enacted over several years. That’s because retail gas prices are influenced by complex factors, including the price of crude oil and supply-and-demand pressures,” ABC reported.
“The real problem with this approach at both the federal and the state level is that there’s no way to ensure that the people will see this savings when they go to the gas pump to fill up their cars, their SUVs and trucks,” said Jim Tymon, the executive director of the American Association of State Highway and Transportation Officials.
Joseph Curl has covered politics for 35 years, including 12 years as White House correspondent, and ran the Drudge Report from 2010 to 2015. Send tips to [email protected] and follow him on Twitter @josephcurl.