Biden downplays inflation concerns as far Left pushes for more spending

Price inflation could undermine President Joe Biden’s sweeping infrastructure agenda, but the White House will not admit it.

Consumer prices last month were 5.4% higher than July 2020, reaching the same elevated level as June and the largest spike since 2008. But while the White House focused on how increases were less than expected, the data have left centrist Democrats skittish about their party’s spending priorities and Republicans gleeful about next year’s midterm elections.

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Millions of voters are feeling economically squeezed, especially with food and gas, according to former Kansas Republican Rep. Tim Huelskamp.

“If Biden and his Democrat allies continue their government spending binge this fall, I predict they will be blamed for an overheated economy in November of 2022,” the ex-Tea Party Caucus chairman told the Washington Examiner.

Biden conceded Wednesday during an economic speech that middle-class families were “feeling the pinch.” But he painted a rosier picture of the problem before contending his infrastructure frameworks would provide struggling families with more “breathing room.”

“If your primary concern right now is the cost of living, you should support this plan, not oppose it,” he said from the White House.

Biden promised he would “keep a careful eye on inflation,” trusting the Federal Reserve Bank to take action if required. He also said his administration was looking at global supply chain kinks and cracking down on monopoly-like practices to improve competitiveness and lower costs. His chief economic adviser Brian Deese, for example, had asked the Federal Trade Commission to monitor the energy sector and stop price gouging at gas pumps nationwide.

West Virginia Democratic Sen. Joe Manchin stepped on his party’s success in kick-starting the budget process this week by repeating his opposition to their $3.5 trillion Democrats-only social welfare and climate reconciliation bill — the counterpart legislation to the $1.2 trillion bipartisan bricks-and-mortar infrastructure measure he helped negotiate.

“Given the current state of the economic recovery, it is simply irresponsible to continue spending at levels more suited to respond to a Great Depression or Great Recession — not an economy that is on the verge of overheating,” he wrote in a statement.

Manchin secured a third term in 2018 by 3 percentage points, representing a state former President Donald Trump seized last year by almost 40 percentage points. His reservations are being amplified by Republicans hoping to tip the balance of power in Congress, as Democrats have a slim three-seat majority in the House and Vice President Kamala Harris has the tiebreaking vote in the evenly divided Senate.

Liberal Democrats pounced on Manchin’s comments Wednesday, including Justice Democrats spokesman Waleed Shahid. Justice Democrats is a political action committee critical to the rise of the so-called “Squad.”

“Overheating? West Virginia’s poverty rate is 16%” Shahid tweeted.

Sawyer Hackett, executive director of 2020 Democratic presidential candidate and former Housing and Urban Development Secretary Julian Castro’s People First Future organization, was more direct. He advised liberal Democrats to block the bipartisan infrastructure deal Manchin and Arizona Democratic Sen. Kyrsten Sinema struck with Republicans.

“Progressives can and should tank the Manchin/Sinema-negotiated plan if they’re not on board with the reconciliation bill,” he tweeted. “Progressives were kept out of negotiation. They know as well as moderates that we have one bite at the apple here.”

But White House press secretary Jen Psaki was more diplomatic. She said Manchin had “confounded a couple of things” when he said he worried about the reconciliation bill’s cost and contribution to $28 trillion in federal debt. She also declined to speculate whether Biden would accept a cheaper offer, only saying he wanted to sign it into law “as soon as he can.”

“This reconciliation package includes the Build Back Better agenda, key investments in childcare, additional investments in climate change, addressing the climate crisis, additional investments to lower costs for people across the country,” she said. “He’s certainly expressed a comfort with the $3.5 trillion size, as you all know, and obviously, there’s a lot of work ahead as we work to gather support for this package.”

Psaki also emphasized “core inflation” was “below expectations.”

“We also continue to believe that, as the economy turns back on and … as businesses are starting to move, as the supply, as the demands start to change in the economy, that there will be transitory impacts … as it relates to inflation,” she said. “Those are projections that have been made, of course, not just by the Federal Reserve, but by CBO, Goldman Sachs, UBS, Moody’s, and others. They’ve also all predicted that … inflation will come down next year, and that those are the projections that we have [to] abide by.

Schumer had previously pledged the reconciliation bill would still incorporate “every one” of Biden’s proposals “in a big, robust way.”

“There are some in my caucus who might believe it’s too much. There are some in my caucus who believe it’s too little,” he added. “We are going to all come together.”

As the White House tries to frame current inflation as a short-term trend, Republicans previewed their “Bidenomics” 2022 midterm election cycle attacks.

“What does that mean for workers? Biden’s hidden tax hike has completely wiped out any wage gains,” Republican National Committee spokesman Tommy Piggott told reporters. “The last thing Americans need is the Democrats’ reckless $3.5 trillion tax-and-spending spree that will only make rising prices worse.”

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The Democrats’ reconciliation bill cleared a procedural hurdle this week when the Senate voted 50-49 on a budget resolution one day after the chamber sent the bipartisan infrastructure accord to the House. The resolution instructs relevant Senate committees to begin drafting their share of the legislation before a Sept. 15 deadline. The House will reconvene in two weeks to consider the bipartisan measure.