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You are at:Home » Gas tax holiday boost collides with highway trust fund fears
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Gas tax holiday boost collides with highway trust fund fears

Machinery AsiaBy Machinery AsiaMay 12, 2026No Comments5 Mins Read
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A bipartisan effort in Congress to suspend the federal gasoline tax is growing as U.S. fuel prices hit their highest since 2022, facing opposition from engineering and transportation groups that warned it could further limit federal infrastructure funding ahead of surface transportation negotiations.

AAA said the national average price of a gallon of regular gasoline had risen to about $4.55 on May 7, up about $1.40 from a year earlier, after rising 25 cents for the second week in a row.

The proposals follow President Donald Trump’s public support this week for temporarily suspending the federal gas tax as motorists face much higher fuel costs.

Sen. Josh Hawley, R-Mo., introduced legislation on May 11 that would suspend federal taxes on gasoline and diesel for 90 days, with the president authorized to extend the suspension for another 90 days. Hawley said the proposal would provide “immediate relief” to consumers facing higher fuel costs.

Separate Democratic legislation introduced earlier this spring by Sens. Mark Kelly, D-Ariz., and Richard Blumenthal, D-Conn., along with companion House legislation introduced by Reps. Chris Pappas, D-N.H., and Kim Schrier, D-Wash., would suspend the General Gasoline Trust Fund’s 18.4 cents per gallon October gasoline1. lost revenue

Rep. Jeff Van Drew, RNJ, has separately proposed legislation that would suspend federal fuel taxes on gasoline, diesel, kerosene and jet fuel for 18 months before phasing the taxes back in.

Rep. Anna Paulina Luna, R-Florida, also said she plans to introduce legislation aligned with Trump’s call for a temporary suspension of the gas tax.

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Increases pressure on highway trust fund

The American Society of Civil Engineers said on May 12 that it “strongly opposes” proposals to end the federal gasoline tax, arguing that the measure undermines investment in transportation without offering any guarantee that consumers would see significant savings at the pump.

US Energy Information Administration line chart showing weekly US retail gasoline prices rising sharply in 2026 to near recent record highs.

U.S. retail gasoline prices have risen to their highest levels since 2022, helping fuel bipartisan calls in Congress to temporarily suspend the federal gas tax.

Chart: US Energy Information Administration

“The suspension of the gasoline tax would result in the loss of billions in revenue from the Highway Trust Fund, significantly diminishing much of the progress made in recent years to improve our nation’s vital infrastructure systems,” ASCE President Marsha Anderson Bomar said in a statement.

ASCE said the gas tax has already lost significant purchasing power because it hasn’t been raised in more than three decades, despite rising infrastructure maintenance and capital costs. The organization also warned that suspending the tax would set “a dangerous precedent” during periods of fuel price volatility.

Transportation construction groups are raising similar concerns. In a May 11 statement, the American Highway and Transportation Builders Association said it has “long opposed federal gasoline tax suspensions because of their adverse impact on transportation investment and because they fail to achieve the stated goal of lowering fuel prices.”

ARTBA and its allies in the Transportation Construction Coalition also urged Congress to focus on “robust reauthorization of federal highway and transit programs” instead of temporarily suspending fuel taxes.


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Construction groups floating targets for the following surface transport funding legislation


A stagnant funding mechanism

The federal gasoline tax, unchanged since 1993, is a major source of revenue for the Highway Trust Fund, which finances federal highway and transit programs. The federal diesel tax, currently 24.4 cents per gallon, is especially important for freight and heavy construction activity tied to federally funded infrastructure work.

Transportation agencies and contractors are watching the debate closely because federal highway formula funding remains a major driver of state transportation capital programs.

The Highway Trust Fund has already required repeated transfers from the federal general fund as fuel tax revenues have failed to keep pace with transportation obligations.

The current surface transportation authorization under the Jobs and Infrastructure Investment Act expires Sept. 30, heightening concerns about the long-term stability of federal transportation funding.

The House Transportation and Infrastructure Committee had originally targeted April 29 to mark up the surface transportation reauthorization legislation, but the schedule moved to May and no full text of the bill has yet been released.

While some Democratic proposals would replenish the highway trust fund through general fund transfers, infrastructure groups warned the approach would still increase pressure on federal finances and weaken the stability of long-term transportation funding.

The Bipartisan Policy Center estimated April 28 that a five-month suspension of federal gas and diesel taxes would reduce Highway Trust Fund revenue by about $17 billion, or about 46 percent of projected 2026 fuel tax receipts before accounting for replacement funds or other tax offsets.

The debate also comes as transportation agencies evaluate what parts of IIJA-era funding Congress can continue after Sept. 30. A recent ENR analysis found that some supplemental transportation credits written directly into the IIJA, including portions of the Bridge Formula Program, could expire without further congressional action.

ASCE urged Congress to seek a long-term surface transportation reauthorization package with stable funding mechanisms capable of supporting future infrastructure investments.

“Strong transportation networks improve economic growth, save families money and ensure public safety,” Bomar said, “which is far more impactful for Americans than minimal potential savings at the pump.”

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