The White House plans to send gas discount cards complicated by the shortage of chips

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In recent days, top White House aides have explored new ideas for responding to high gas prices and revisited some they had previously ruled out, desperate to show that the administration is trying to address voter frustration. due to increased pump costs.

Biden officials are taking a second look at whether the federal government could send discount cards to millions of U.S. drivers to help them pay at gas stations, an idea they examined months ago before ruling it out. Assistants had found that the shortage in the U.S. chip industry would make it difficult to produce enough discount cards, two people familiar with the matter said. White House officials also fear that there is no way to prevent consumers from using them for purchases other than gasoline, according to another person familiar with the discussions. Even if the administration accepts the proposal, it would probably require congressional approval and face long odds among lawmakers wary of spending more money.

Biden’s aides have also been studying in recent days invoking the Defense Production Act to move diesel and other refined products in case localized shortages materialize, two people familiar with the matter said. Diesel prices have risen sharply, posing a major threat to the country’s transport and shipping industries, although experts say shortages appear unlikely for now.

The revived brainstorming reflects how higher fuel costs have emerged as one of the Biden administration’s main political threats and a serious obstacle to the economy as a whole. The White House has taken a number of actions to try to solve the problem, such as committing to a historic release of the country’s oil reserves and, on Wednesday, sending a letter to the country’s refineries calling for more production and criticizing its profits. . President Biden has also sought to increase production internationally, boosting global oil producers and coordinating the release of domestic reserves with U.S. allies.

But it seems that these measures have not helped substantially. The national average gas price topped $ 5 a gallon for the first time this weekend, up about 11 percent from last month, according to AAA. (The average fell very slightly on both Thursday and Friday, but remains at $ 5.) Polls suggest widespread frustration with rising prices, raising the likelihood that voters will punish Democrats this fall and give Republicans control. at least one chamber of Congress next year.

White House officials have struggled in recent days to review all possible federal policy responses. Officials have also spoken of telling governors to reduce or waive their gas taxes, said another person familiar with the administration’s internal discussions.

States see the gas tax come to a halt as fuel prices rise

People, who have spoken on condition of anonymity to talk about private conversations, have stressed that these measures are being explored in a preliminary manner and that no final decisions have been made.

Attempts to explore pre-high energy pricing solutions reflect the scarcity of solutions available to the administration, as well as the scope of the challenge they pose. White House spokesmen have said all options are on the table, but a White House official said the discount proposal, pushed by some Democrats in Congress, is unlikely to move forward because of logistical difficulties. Critics also say the idea could be counterproductive by further raising prices by increasing consumer demand.

Other proposals by policy experts include the suspension of the Jones Act, which would reduce shipping costs and lower the cost of transporting gasoline from the Gulf Coast to the east coast, imposing price controls and banning exports of US energy. But all of these ideas have their own political and practical drawbacks, with the Jones Act backed by influential trade union groups and economists warning that any supply restrictions could exacerbate the problem. One person said the White House has also analyzed limits on fuel exports, an idea it first reported on Thursday by Bloomberg News.

“Not only is there no existing solution, but no one thinks there will be a convincing solution,” said a White House external economic adviser. “They fight for narrative rather than substance, because realistically, what will they do?”

Within Biden’s frustration with rising prices

Biden on Wednesday defended his administration’s record, arguing that it is doing everything possible to reduce the costs of families, including the bomb, in the face of the huge headwinds.

“I am doing everything in my power to curb Putin’s rising gas prices,” Biden said, referring to Russian President Vladimir Putin. “We’re going to work to reduce gas and food prices. We can save money on households and other items.”

Rising gas prices have many factors, but were intensified by the Russian invasion of Ukraine and subsequent Western sanctions on the Kremlin, which disrupted the supply of what had been the world’s third largest oil producer. Russian production has fallen by more than 1 million barrels a day due to export sanctions that complicate sales and sanctions on imports that hurt production, according to Rory Johnston, an analyst at Commodity Context. Refineries needed to convert oil to gas and other products are expanding to their limits, with Russian offline refineries and U.S. refining capacity shrinking by about 5 percent, according to the Energy Information Administration. .

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