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US President Joe Biden speaks about the economy during the Covid-19 pandemic in the State Dining Room of the White House in Washington, DC on July 19, 2021.
Saul Loeb | AFP | Getty Images
WASHINGTON – As consumer prices rise across large swathes of the U.S. economy, President Joe Biden has a message for voters: If you’re worried about inflation, you need to support infrastructure and infrastructure plans. Biden’s domestic spending.
“My ‘Build Back Better’ plan will be a force in securing lower prices for Americans in the future,” Biden said in a speech Monday at the White House.
Biden argued that the investments in infrastructure and support for families contained in his $ 4.5 trillion national spending plan will fund decades of economic growth, increase the workforce and keep prices low.
“If your main concern right now is inflation, you should be even more excited about this plan,” the president said.
Still, the fact that Biden is tackling inflation at all is a sign of growing concern among Democrats that the price hike is a powerful political stick Republicans could wield against them in the mid-term election of the United States. ‘next year.
For now, Biden is still enjoying a high preferential rate, and most voters approve of the programs he wants to fund with his two bills.
But vulnerable Democrats in the House and Senate have good reason to be concerned about the year ahead.
Republicans already have an advantage as historical trends favor the opposition party in the first half of the year after a new president is elected.
On top of that, consumer prices rose 5.4% in June from a year ago, according to figures from the Ministry of Labor, the biggest increase since 2008.
In a recent poll by Marist and PBS NewsHour, 26% of all adults said their biggest economic concern right now is inflation, more than unemployment.
Meanwhile, the view of Biden’s economic advisers is largely unchanged: They don’t deny that prices are going up, but they insist the effect is transient and should go away within a few months.
“We will still have several months of rapid inflation, so I’m not saying this is a one-month phenomenon,” Treasury Secretary Janet Yellen told CNBC in an interview broadcast Thursday.
“But I think in the medium term we will see inflation return to normal levels,” she added.
However, if inflation continues at a steady pace for the rest of the year, it will fuel Republicans’ argument that Biden’s domestic spending program is reckless and Democrats are trying to inject billions of dollars. additional in an already overheated economy.
This argument was fully exposed last week in the Senate, where Minority Leader Mitch McConnell accused Democrats of trying to get out of inflation.
“Now the Democrats’ big idea is to try to get out of inflation,” McConnell said Thursday. “Inflating out of inflation, well, it’s going to be a wild ride for working Americans.”
Meanwhile, Republican Senator from Texas, John Cornyn, has spoken out against what he called the Democrats’ “irresponsible spending windfall”.
Joni Ernst of Iowa took it a step further by putting on props that resembled the game show “The Price Is Right”. The senator’s message? “The price is going up.”
The GOP’s argument has a few flaws: First, the fact that any money that Congress allocates this year to Biden’s domestic spending bills will not flow into the economy until at least six months after the bills are signed, and will have therefore little impact on the current post-pandemic price increases.
The other problem with the Republican case is that a significant portion of the current price increases are due to supply chain imbalances linked to the pandemic. Biden cited a figure of 60%.
Most notable of these is the semiconductor chip shortage that has forced auto factories across the country to sit idle this spring, reducing the supply of available cars and pushing up the price of existing cars.
Global supply chain disruptions upset the White House this spring. Biden’s aides privately conceded that there was little the government could do to fix them.
“As demand returns, there are going to be challenges in the global supply chain,” Biden said Monday.
The president acknowledged that the chip shortage poses a great challenge.
“My administration is doing everything possible to remedy this. But, again, these disruptions are temporary,” he said.
With 477 days to go to the midterm elections, the big question on Democrats’ minds is how temporary they will be.
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