Lawmakers want to mitigate high gas prices with payments to Americans

High gas prices have put a strain on many Americans’ budgets.

Now some Democratic lawmakers are proposing a possible solution: direct rebate payments to Americans.

Three congressional leaders have proposed $100 energy rebate payments that would be sent to Americans during any month where the national average gas price is higher than $4 per gallon.

The bill — called the Gas Rebate Act of 2022 — was proposed by Reps. Mike Thompson, D-Calif.; John Larson, D-Conn.; and Lauren Underwood, D-Ill..

More from Personal Finance:
7 things to know about the SEC climate rule
Here’s the average tax refund so far this year
How to avoid a 6-figure tax penalty on foreign bank accounts

Other Washington Democrats have issued proposals. Rep. Ro Khanna of California and Sen. Sheldon Whitehouse of Rhode Island have suggested raising taxes on big oil companies and paying rebates of roughly $240 per year for single filers and $360 per year to joint filers.

Rep. Peter DeFazio, a Democrat from Oregon, has also proposed a bill that would tax oil companies and provide rebates to consumers.

Separately in California, Democratic Gov. Gavin Newsom has a plan to give $400 debit cards to the state’s registered vehicle owners. Drivers would be eligible to receive up to two of those tax refund payments.

The proposals come as gas prices around the country have soared in the wake of Russia’s invasion of Ukraine, though costs at the pump had already started climbing before the conflict.

The national average for a gallon of gas is currently $4.24, according to AAA, up from $3.54 a month ago and $2.87 a year ago.

Prices vary around the country, with states in the Northeast and the West currently facing the highest prices.

California is one of those states, with an average price per gallon of $5.88. That’s up from $4.77 a month ago and $3.88 a year ago.

Lawmakers have been in search of creative solutions to help ease consumers’ pain as record high inflation pushes up prices everywhere.

States, including Maryland and Georgia, are in the process of implementing gas tax holidays. Legislation to temporarily suspend the federal gas tax has also been proposed.

Critics have taken issue with temporarily suspending those taxes, because they help fund road maintenance and may not result in big savings for drivers.

The proposed rebates would be an improvement from a gas tax suspension, according to Alex Muresianu, a federal policy analyst at the Tax Foundation, as they wouldn’t run the risk of pushing up demand for gas.

But it might not make sense to just target drivers when consumer prices are high overall. “That matters for people who are lower income and don’t drive, too,” Muresianu said.

Moreover, current economic conditions don’t strengthen the argument for more stimulus payments.

“It doesn’t make…