High inflation prompts Biden to focus message on rising prices

As a key inflation benchmark rose to a three-decade high last week — consumer prices rose 6.2% in October, the fifth-straight month of growth of 5% or more — President Biden spoke with those measures. started doing what his administration is doing to deal with the high. Prices on groceries, cars, gasoline, rent and medical care.

The President and his team have kept inflation tentative and will subside sometime next year. But the message expanded over the past week underscores the risk that disruptions from rising demand and supply-chain constraints could become kitchen-table issues for voters.

“Consumer prices are very high,” Biden said during an event in Baltimore on the day of the CPI release. “Everything from a gallon of gas to a loaf of bread costs more. And that’s worrying, even though wages are rising.”

Much is riding on rising inflationary fears. It has fueled opposition from the Republican Party in the same way that Democrats are gearing up to comply with the recent passage of a $1 trillion bipartisan infrastructure bill with a $2 trillion social-spend and climate legislation, but only Congress. With the support of a thin majority of the Democratic Party in both chambers of the U.S. , The bills come after Democrats pushed through a $1.9 trillion Covid-19 aid package over GOP protests earlier this year.

The White House has long said that it sees inflation as tied to a number of short-term problems, including supply-chain constraints. It is taking recent steps to reduce the shortage, which it says is linked to the pandemic. Meanwhile, administration officials have highlighted other positive economic indicators, such as strong wages and job growth, and pointed to areas where prices had fallen to indicate that problems are limited.

Asked whether prices will drop until the next fall, Treasury Secretary Janet Yellen said in an interview aired Sunday on CBS’s “Face the Nation” that “it really depends on the pandemic. The pandemic affects the economy and inflation.” And if we want to bring down inflation, I think the most important thing we can do is to continue making progress against the pandemic.”

She said that if labor supply and demand issues return to normal – and “I would expect that if we are successful with the pandemic sometime in the second half of next year – I would expect prices to go back to normal.” “

Corporate executives have started citing inflation concerns in their quarterly calls with investors. “Inflation is now a top-level concern for the US business community. The administration needs to begin evaluating all of its policies in the context of the near-term inflation impact,” said Neil Bradley, chief policy officer of the US Chamber of Commerce.

Further pressure is coming from financial markets, which have weakened. The emerging consensus among investors now expects the Federal Reserve to raise interest rates in 2022, rather than as originally anticipated in 2023.

“You can see what’s going to happen next. We’ll keep inflation going, and then interest rates will go up,” said Sen. Rick Scott (R., Fla.), who heads the GOP’s Senate-campaign arm for months and months. attention has been sought from inflation. ,

“It’s a gold mine for us,” said Mr Scott.

Republicans argue that the Democrats’ social-spending bill will fuel inflation by injecting trillions of dollars into a warming economy. He says he sees these issues as a powerful political argument in next year’s midterm elections, when Mr Biden’s party is at risk of losing legislative power.

Democrats currently have a narrow majority in the House and control an equally divided Senate as Vice President Kamala Harris holds the tiebreaking vote. And yet some even within the president’s own party are sounding the alarm at the threat that poses a price hike for the economy.

Sen. Joe Manchin, (D., WVA) tweeted last week that “the threat posed by record inflation to the American people is not ‘temporary’ and is instead getting worse.” Mr Biden needs Mr Manchin to vote for the social-spending and climate bill, and cannot afford to lose any Democratic votes because of the party’s narrow control over the Senate.

White House officials say their legislative plans will not exacerbate inflation problems because the proposal to pump money into education, health care and the environment is a long-term investment, meant to be spent slowly over the next decade and mostly taxes. is paid through. They say the proposed legislation, which Republicans are hoping to oppose unanimously, would ultimately lower prices and increase productivity.

“We keep betting that as the economy recovers, as the pandemic ends, we do a lot of work to shut down supply chains and make them higher velocity and more liquid, as That these things happen, these pressures are going to ease. ,” said Mike Pyle, the Vice President’s Chief Economic Adviser.

Public acceptance of Mr Biden’s management of the economy has declined. An October NBC News poll showed that 57% of Americans disapprove of Mr Biden’s handling of the economy, while 40% approved. An April NBC News poll found that 52% approved of the handling of the economy and 43% disapproved.

White House press secretary Jen Psaki argued on Friday that inflation had become a “political pressure”, adding that inflation was expected to “be significantly lower next year”.

Democratic pollster Jeff Horwitt said frustration with the economy was contributing to Mr Biden’s dwindling polling numbers. “As the economy goes, so does Joe Biden and right now people are not happy with how things are going financially and I think we see that in his job ratings.”

Mr Horwitt said it was important for Mr Biden to show he was trying to address economic concerns by passing his legislative agenda and registering a “tangible and meaningful victory for voters”.

According to AP VoteCast, a poll of 2,655 registered voters in Virginia, more than a third of the state’s voters said the economy and jobs were the most important issues in the gubernatorial election earlier this month.

Former Democratic Governor Terry McAuliffe lost his old job in a bid to retake political newcomer Glenn Youngkin, a Republican. In a state where Biden defeated Trump by 10 percentage points in 2020, a majority of voters disapprove of the current president’s performance.

Chris Taylor, a spokesman for the campaign wing of the House Democrats, said Mr Biden’s efforts to ease supply-chain bottlenecks would “help reduce costs for working families” and argued that the infrastructure and social-spending bills “would”. anti-inflationary investment”. America’s future.”