The federal government needs to rein in spending to combat inflation and a looming recession, said the largest conservative coalition in the House in a detailed new memo with directions on how to do so.
The Republican Study Committee sent a memo, exclusively obtained by the Washington Examiner, to members outlining seven steps to combat stagflation, or inflation combined with economic stagnation. Proposals include halting any increase in government spending, ending remaining global COVID-19 restrictions, and stimulating the economy with domestic energy production. The inflation-fighting ideas come after Wednesday’s release of Labor Department statistics showing inflation reached 9.1% since last year, the steepest increase in 40 years.
WORSENING INFLATION IS A NEW HEADACHE FOR DEMOCRATS TRYING TO AVOID MIDTERM DISASTER
“The root of the problem with the Biden economy is Democrats’ out-of-control spending,” the memo says about President Joe Biden and his administration. “More spending would add more fuel to the inflation fire. Congress should pass a ‘no-cost’ stimulus package to reduce prices, increase productivity and jumpstart our economy.”
The RSC memo warns that trying to fix the economy with a stimulus bill, such as the $5 trillion reconciliation bill under consideration in the Senate, would be “catastrophic.” The first step of the seven-part RSC plan is to “rein in excessive government spending,” followed by ramping up U.S. domestic energy production. Steps three through five address the unfolding effects of the pandemic shutdowns by calling for an end to restrictions, encouraging people to return to work, and fixing supply chain issues. The last two points call for pro-growth tax policy and a light regulatory hand.
“Joe Biden has been in office for two years and needs to take responsibility for what he’s done to the economy,” said Chairman Jim Banks (R-IN). “His spending spree raised prices and lowered growth. More of the same won’t help — Congress and the White House need to get out of the way.”
Biden said the inflation number was “out of date” in a Wednesday statement and blamed the economic crisis on Russia’s war in Ukraine and the pandemic.
“Inflation is our most pressing economic challenge,” Biden said. “It is hitting almost every country in the world. It is little comfort to Americans to know that inflation is also high in Europe and higher in many countries there than in America. But it is a reminder that all major economies are battling this COVID-related challenge, made worse by Putin’s unconscionable aggression.”
Congressional Democrats are trying to garner support for the reconciliation bill that would increase government spending while also trying to combat voter woes over the chipping away at their wallets. House Speaker Nancy Pelosi said Wednesday that she agrees with Biden that this inflation report will be the “peak” of the crisis and said, “We’re going to be going down from here.”
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The Senate Democratic reconciliation bill will need the support of centrist Sen. Joe Manchin (D-WV), who has said he opposes unnecessary increases in spending.
“For more than a year, leaders in Washington have ignored the serious concerns raised by myself and others about the rising cost of inflation,” Manchin said in a statement on Wednesday. “While Washington seems to now understand this reality, it is time for us to work together to get unnecessary spending under control, produce more energy at home, and take more active and serious steps to address this record inflation that now poses a clear and present danger to our economy.”
