The White House reacted to January’s poor inflation report by calling on Congress to pass President Joe Biden’s spending proposals immediately.
The Consumer Price Index report published Thursday shows that year-over-year inflation rose to 7.5% in January, the highest rate since 1982. Furthermore, the month-over-month rate increased by 0.6%. The monthly change had decreased in December and November, something White House officials had said was an indication that “peak” inflation had already occurred and that upward pressure on prices would ease in 2022.
JANUARY INFLATION RISES TO HIGHEST POINT SINCE 1982
National Economic Council Director Brian Deese said during a televised interview Thursday that this latest report shows that, despite the moderate wage growth ushered in by the administration, “this inflation challenge is real, and we need to address it.”
“We need to deliver relief directly, and there’s a lot of practical ways that we can do this,” he continued before outlining Biden’s plans to lower the cost of prescription drugs, everyday utilities, and childcare. “We could do so without increasing the deficit and then, as a result, not adding to inflationary pressures. So we’re gonna keep focused on this.”
White House chief of staff Ron Klain advised Congress that passing “something like” Biden’s defeated Build Back Better proposal is necessary to “fight inflation.” Klain retweeted a suggestion from former Obama administration economist Jason Furman that passing a spending package that “is paid for” would not increase the U.S. deficit. In that thread, Furman also wrote that “the truth is the President can do very little to lower inflation.”
If Congress wants to fight inflation, here’s some good advice: https://t.co/QSjxB3a6Mg
— Ronald Klain (@WHCOS) February 10, 2022
The truth is the President can do very little to lower inflation. He can & should do everything he can on supply (and he is doing most of it already) but won’t add up to much.
Congress *could* lower inflation with contractionary fiscal policy but I would leave it to the Fed.
— Jason Furman (@jasonfurman) February 10, 2022
Concerns about increased federal spending driving inflation were a major reason why centrist West Virginia Democratic Sen. Joe Manchin balked at Biden’s proposals in the first place.
Biden himself addressed the report in a more optimistic statement, claiming that his “two top economic priorities have been to create a growing economy with more good-paying jobs and to lower the prices Americans have faced from the global problem of inflation related to the pandemic.”
Biden specifically noted the “historic success” on the record number of jobs added during his first year in office, calling it a sign “that we will make it through this challenge” and maintained that economic forecasters are predicting prices to decrease later in 2022.
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“My administration will continue to be all hands on deck to win this fight. We will continue to rebuild our infrastructure and manufacturing, so we can make more in America and strengthen our supply chains here at home,” he continued. “We will continue to fight for costs in areas that have held back families and working people for decades, from prescription drugs to child care and elder care to their energy costs. And we will continue to promote more competition to make our markets more competitive and give consumers more choices.”
