As inflation threat of to come down the democrats congressional majorities and perhaps his presidency, Joe Biden has staunchly defended the federal spending he has already signed off on and what he would still like lawmakers to send him.
After Biden spent much of the last month denying his spending contributed significantly to inflation run to a high of 41Senate Democrats are still in talk to salvage parts of the Build Back Better agenda stalled in mid-July.
“We have the strongest economy in the world,” Biden told reporters defiantly during a press conference in madrid to end his trip to Europe. “Our inflation rates are lower than those of other countries in the world.”
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It capped a month in which Biden has often seemed offended by the idea that heaping another $1.9 trillion on top of the more than $3 trillion in COVID-19 spending enacted by the previous administration during the pandemic could have helped fuel inflation – as it was warned in advance. He told the Associated press in June that there was “no evidence” for this claim.
“You might wonder if it had a marginal impact – a minor impact on inflation,” he said. “I don’t think that’s the case. And most economists don’t think so. But the idea that it caused inflation is bizarre.
“I don’t want to hear those lies about reckless spending anymore. We’re changing people’s lives,” Biden told an audience of union members in Philadelphia around the same time. He cited a lower annual budget deficit than he inherited from the former president donald trump.
treasury secretary Janet Yellenalready on the defensive for telling CNN it was ‘wrong’ in its inflation projections, had to deny reports that it had called for greater spending restraint from the Biden Administration.
“I never called for a smaller US bailout to be passed,” said Yellen, who previously chaired the Federal Reserve.
“Excessive federal spending is partly responsible for today’s high inflation, and Trump is just as culpable as Biden,” said Chris Edwards, director of fiscal and fiscal policy studies at the libertarian Cato Institute. Washington Examiner. “Trump signed a massive and excessive $900 billion new stimulus package in December 2020.”
Many economists across the spectrum see Biden’s spending like the drop that broke the camel’s back. “I think we can say with certainty that we would have less inflation and fewer problems to solve right now if the US bailout had been optimally sized,” said Wendy Edelberg, senior economics researcher at the liberal Brookings Institution. A declaration.
Marc Goldwein of the Committee for a Responsible Federal Budget previously compared it to pouring “gasoline on the fire”, saying: “It was almost written as if we hadn’t just passed a stimulus package of a trillion dollars in December”.
Former Treasury Secretary Larry Summers, once a top economic adviser to Democratic Presidents Bill Clinton and Barack Obama, warned Biden “overheated” the economy. Summers are now predict a recession.
Biden has requested an additional $3 trillion in new spending for a social and climate spending bill that stalled in the Senate late last year. He also signed into law a $1.2 trillion bipartisan bill. Infrastructure invoice.
“And remember, it was Trump who long called for a trillion-dollar infrastructure package, which Congress finally passed in 2021, and which is also fueling inflation today,” he said. Edwards.
Biden has traveled the country touting projects funded by these spending bills, called for more spending to help make various things more affordable to offset inflation, and more and more sunk high gas price like a necessity of war fight Russia in Ukraine.
All of this has given Republicans new openings in a election cycle in which they were already favored. Biden’s jobs approval rating has fallen into the 30s in several polls, with inflation and the economy being the main drivers of the decline.
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While inflation is a political and economic problem in its own right, the tightening that the Fed is forced to do to combat it could lead to a recession. economy already slightly shrunk in the first quarter of this year. That would threaten the low unemployment rate and garish gross domestic product growth numbers that Biden has cited as major economic strengths.
“The current amount of debt, inflation and unfunded liabilities like Social Security, Medicare, Medicaid and public pensions should scare every American,” said Republican strategist Bradley Blakeman. “Now is not the time to pass. It’s time to be fiscally responsible.