US Business

Joe Biden pitched a temporary fuel tax break Wednesday to help American drivers face the highest inflation in four decades, but critics called it attempted window dressing by an unpopular US president ahead of difficult midterm elections.

Biden is asking Congress to suspend the federal fuel tax for three months as price increases — in large part spurred by fallout from President Vladimir Putin’s invasion of Ukraine and subsequent Western sanctions on Russia — drive general inflation.

It seems unlikely so far that Congress will give the green light.

The White House wants to lift the 18 cents a gallon federal tax on gasoline and 24 cents a gallon on diesel until September, and will call on state governments to suspend their own taxes to “provide direct relief to American consumers who have been hit with Putin’s price hike,” a senior administration official said.

The official noted that gasoline prices — now averaging near $5 per gallon (3.78 liters) — had gone up almost $2 since the start of the Ukraine invasion.

“The president recognizes the significant challenge that high gas prices pose to working families,” the official said, while conceding the tax suspension alone would not offset household costs.

A handful of states including New York and Connecticut have already suspended fuel taxes or delayed planned tax increases.

But according to analysts, some 46 states have yet to act, including Democratic-governed California, where gasoline is the most taxed and the most expensive, at well over $6 a gallon.

Federal tax revenues on gas and diesel help pay for the Highway Trust Fund, which maintains roads and supports public transport, but Biden will call on Congress to ensure the estimated $10 billion gap that would be caused by a three month tax break is made up from other sources.

Whether Congress, where Democrats hold only a narrow majority over Republicans, will pass tax relief is a big question. Even Biden’s backers are lukewarm.

“I’ve not been a proponent,” Steny Hoyer, a senior leader of the Democratic party in Congress, told Politico. “I just don’t know that it gives much relief.”

Jason Furman, a former top economic adviser to president Barack Obama — who himself once dismissed so-called gas tax holidays as a “gimmick” — also said the move would not help regular people. 

“It would be very unlikely that gas prices would fall by more than a dime because of this change. And oil company profits would go up by billions of dollars,” he told NPR.

– Biden’s populist mission –

Biden will urge retailers at filling stations to apply any tax cuts immediately, as well as push refiners to expand their crude-processing capacity in hope that the combined measures could cut the price of gasoline by as much as a dollar a gallon.

He has previously tried other measures, including releasing a million barrels of oil a day from the Strategic Petroleum Reserve, negotiating the release of an additional 60 million barrels from international partners, and expanding access to biofuels.

Nothing so far has had an appreciable effect.

With Democrats fearing a severe defeat in November midterm elections — thereby leaving Biden weakened for the rest of his first term in office — the president has turned to an increasingly populist message, portraying himself as fighting for the middle class against profiteering big oil.

The White House recently called out groups including ExxonMobil and Chevron, denouncing their profit margins as “well above normal” and calling it their patriotic duty to increase output.

“Exxon has made more money than God this quarter,” Biden has said.

Energy Secretary Jennifer Granholm is due to meet with refiners Thursday to urge them to contribute to these measures, including increasing their production output.

On Tuesday, Biden dismissed a complaint from Chevron’s CEO that the industry was being vilified.

“I didn’t know they’d get their feelings hurt that quickly,” Biden said.

Moderna on Wednesday said its new Covid booster candidate, which it is hoping to get approved this fall, performed well against Omicron’s latest subvariants.

The US biotech company announced earlier this month that the so-called “bivalent” vaccine, which targets the original Covid strain and original Omicron BA.1, performed better against both compared to its original Covid vaccine called Spikevax.

In new results from a clinical study, the company said that the booster also did well against BA.4 and BA.5, Omicron’s latest subvariants that are becoming dominant thanks to their increased ability to evade prior immunity, and enhanced transmissibility.

The bivalent booster elicited high levels of infection-blocking antibodies against BA.4 and BA.5 both in people who were previously infected and those not previously infected.

However even those high levels were still one third the levels achieved against the original Omicron strain, BA.1

“We will submit these data to regulators urgently and are preparing to supply our next generation bivalent booster starting in August, ahead of a potential rise in SARS-CoV-2 infections due to Omicron subvariants in the early fall,” said Moderna CEO Stephane Bancel in a statement.

The BA.4 and BA.5 variants hammered South Africa, where they were first discovered, in April and May — despite high population immunity conferred by prior waves and vaccinations.

Like other Omicron variants they tend to have a milder disease course as they settle less in the lungs and more in the upper nasal passages, causing symptoms like fever, tiredness and loss of smell.

Investigators were headed to Miami Wednesday after a passenger jet’s landing gear collapsed and it caught fire as it touched down at the US city’s international airport, forcing more than 100 people to flee the burning and mangled aircraft.

Three people were hospitalized after the crash of Red Air Flight 203 late Tuesday, according to Miami-Dade fire officials, but no deaths or serious injuries have been reported among those on board.

Dramatic video footage showed people being evacuated from the McDonnell Douglas MD-82 aircraft, lying askew on the runway with its nose crumpled as thick black smoke billows from its body.

Red Air, a Dominican budget carrier which only launched in November last year, said the plane was arriving from Santo Domingo when it met with “technical difficulties.”

“Red Air #203 from Santo Domingo had its landing gear in the nose of the plane collapse, which seems to have caused a fire,” said a statement on the Miami International Airport’s Twitter account.

The National Transportation Safety Board (NTSB), the US government agency in charge of probing civil aviation accidents, tweeted that its team would arrive in Miami on Wednesday.

Red Air said there were 130 passengers and 10 crew on board. A Miami airport spokesman said there was “a total of 126 people on board” the plane. The reason for the discrepancy was not immediately clear.

Google has agreed to pay Wikipedia for content displayed by its search engine, mirroring deals the US tech giant has struck with news outlets in Europe.

The Wikimedia Foundation, the charity that oversees the online encyclopedia, said Google was the first paying customer for its commercial venture Wikimedia Enterprise, which it launched last year.

The Internet Archive, a non-profit that runs a site called the Wayback Machine that saves snapshots of websites and is used to fix Wikipedia links, will be offered the commercial services for free.

“We’re thrilled to be working with them both as our longtime partners,” said Wikimedia’s Lane Becker in a statement on Tuesday.

Wikipedia, one of the world’s most visited websites, is free to use, updated by volunteers and relies on donations to keep afloat.

The new commercial arm will not change that arrangement for individual users, the foundation said.

Google uses material from the site for its “knowledge panel” — a sidebar that accompanies the main search results.

The source of the information is not always shown, a practice that had sparked complaints from Wikimedia.

Google has previously given money to Wikipedia through donations and grants.

“We have long supported the Wikimedia Foundation in pursuit of our shared goals of expanding knowledge and information access for people everywhere,” said Google’s Tim Palmer.

The foundation’s statement did not reveal the value of the Google contract.

French regulators and Google on Tuesday ended a years-long dispute by agreeing a framework for the US firm to pay news outlets for content.

Google said it had already made deals with hundreds of news outlets across Europe, Agence France-Presse among them.

Investigators were headed to Miami Wednesday after a passenger jet’s landing gear collapsed and it caught fire as it touched down at the US city’s international airport, forcing 140 people to flee the burning and mangled aircraft.

Three people were hospitalized after the crash of Red Air Flight 203 late Tuesday, according to Miami-Dade fire officials, but no deaths or serious injuries have been reported among those on board.

Dramatic video footage showed people being evacuated from the McDonnell Douglas MD-82 aircraft, lying askew on the runway with its nose crumpled as thick black smoke billows from its body.

Red Air, a Dominican budget carrier which only launched in November last year, said the plane was arriving from Santo Domingo when it met with “technical difficulties.”

“Red Air #203 from Santo Domingo had its landing gear in the nose of the plane collapse, which seems to have caused a fire,” said a statement on the Miami International Airport’s Twitter account.

The National Transportation Safety Board (NTSB), the US government agency in charge of probing civil aviation accidents, tweeted that its team would arrive in Miami on Wednesday.

Red Air said there were 130 passengers and 10 crew on board. 

“Massive” Russian bombardment of Ukraine’s battleground eastern Lugansk region and key city Severodonetsk has been “hell” for soldiers there, Kyiv said, while insisting that defenders would hold “as long as necessary”.

Moscow’s troops have been pummelling eastern Ukraine for weeks and are slowly advancing, despite fierce resistance from the outgunned Ukrainian military. 

With President Vladimir Putin’s forces tightening their grip on the strategically important city of Severodonetsk in the Donbas, its twin city of Lysychansk is now coming under heavier bombardment.

“The Russian army is massively shelling Lysychansk,” Sergiy Gaiday, governor of the Lugansk region, which includes both cities, wrote on Telegram.

“They are just destroying everything there… They destroyed buildings and unfortunately there are casualties.”

He later wrote that “it’s just hell out there” after four months of shelling in Severodonetsk, across the Donets river — while adding that “our boys are holding their positions and will continue to hold on as long as necessary”.

Russian forces have been occupying villages in the area, and taking control of the two cities would give Moscow control of the whole of Lugansk, allowing them to press further into the Donbas.

After being pushed back from Kyiv and other parts of Ukraine following their February invasion, Moscow is seeking to seize a vast eastern swathe of the country.

In a briefing Wednesday, the Russian defence ministry claimed responsibility for a missile strike it said killed a number of Ukrainian troops in southern Mykolaiv.

In central Ukrainian city Zaporizhzhia, women were training to use Kalashnikov assault rifles in urban combat as Russian forces edged nearer.

“Of course, when you can do something, it’s not so scary to take a machine gun in your hands,” said Ulyana Kiyashko, 29, after moving through an improvised combat zone in a basement.

– ‘Simply destroys’ –

In his daily address Tuesday, Ukrainian President Volodymyr Zelensky also accused the Russian army of “brutal and cynical” shelling in the eastern Kharkiv region. 

“The Russian army is deaf to any rationality. It simply destroys, simply kills,” he said. 

Fifteen people were killed by Russian shelling in Kharkiv Tuesday, its governor said.

Aid group Doctors Without Borders (MSF) said it had gathered accounts of an “outrageous lack of care to distinguish and protect civilians”.

Among hundreds of patients evacuated by train, more than 40 percent were elderly people or children.

Most said Russian or Russian-backed forces were to blame for a spectrum of gruesome injuries.

“Although we cannot specifically point to an intention to target civilians, the decision to use heavy weaponry en masse on densely populated areas means that civilians are inescapably, and are therefore knowingly, being killed and wounded,” said MSF emergency coordinator Christopher Stokes.

On the Russian side, authorities in the Ukraine-bordering Rostov region said Wednesday that a fire at an oil refinery might have been caused by a drone strike, saying parts of unmanned aircraft had been found at the scene.

Away from the battlefield, Moscow was locked in an increasingly bitter dispute with EU member Lithuania over the country’s restrictions on rail traffic to the Russian outpost of Kaliningrad.

The territory is around 1,000 miles (1,600 kilometres) from Moscow, bordering Lithuania and Poland.

By blocking goods arriving from Russia, Lithuania says it is simply adhering to European Union-wide sanctions on Moscow.

But Moscow accused Brussels of an “escalation” and summoned the EU’s ambassador to Russia.

The United States made clear its commitment to Lithuania as an ally in NATO, which considers an attack against one member an attack on all.

“We stand by our NATO allies and we stand by Lithuania,” State Department spokesman Ned Price told reporters in Washington.

With US-Russia tensions soaring, the State Department on Tuesday confirmed a second American, 52-year-old Stephen Zabielski, was killed fighting for Ukraine.

Two other Americans were captured last week in eastern Ukraine. 

A White House spokesman, John Kirby, voiced alarm at Russian statements that it would not apply the Geneva Conventions on the humane treatment of prisoners to the pair.

“It’s appalling that a public official in Russia would even suggest the death penalty for two American citizens that were in Ukraine,” Kirby told reporters.

In a swipe at Washington, Moscow authorities announced that the official address of the US embassy there had been changed to “1 Donetsk People’s Republic Square” after the name of the breakaway Ukrainian region won a public poll.

Meanwhile in Brussels, ministers unanimously agreed Tuesday to grant Ukraine and neighbour Moldova candidate status for membership in the European Union.

Also on the diplomatic front, Moscow complained that its delegates to an Organization for Security and Cooperation in Europe (OSCE) assembly in Britain next month had been refused UK visas.

– ‘Fight for weapons’ –

Western nations have been pumping billions of dollars of weapons into Ukraine, where Defence Minister Oleksiy Reznikov tweeted that powerful German-made Panzerhaubitze 2000 howitzer artillery had reached his country’s forces.

But Zelensky reiterated Ukrainian calls for faster deliveries of weapons. 

“The lives of thousands of people depend directly on the speed of our partners,” he said in his daily address.

Ukraine meanwhile said it struck a Black Sea oil drilling platform off the Crimea peninsula because Russia was using it as a military installation. 

Ukrainian officials say the rig was being used for military purposes.

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