Republicans knock Biden over inflation blame game as consumer prices soar higher
Former Trump economist: We can end inflation quickly if we have a fiscal response
Former Council of Economics Advisers Chairman Kevin Hassett discusses Fed Chair Powell’s testimony on Capitol Hill, Biden blaming Putin for price hikes, oil executives meeting at the White House and recession risk in the U.S.
FIRST ON FOX: Republican lawmakers took aim at President Biden's rosy outlook laid out in an economic report earlier this year, blaming the White House for policy missteps that helped to stoke the hottest inflation in four decades.
The Joint Economic Committee Republicans on Friday released their own response – a copy of which was first shared with FOX Business – to the Biden administration's 2022 economic report, arguing that Biden dismissed the role that a massive $1.9 trillion stimulus package passed in March 2021 played in fueling the recent consumer price spike.
While the Republican lawmakers agreed that supply chain disruptions and shortages from the COVID-19 pandemic bear some responsibility for the inflation spike, they argued those global factors cannot "fully explain the magnitude of U.S. inflation."
For instance, core prices – which exclude more volatile measurements of food and energy – soared in the U.S. after March 2021, following the passage of Democrats' $1.9 trillion American Rescue Plan. By comparison, inflation in countries that rely on the euro remained flat after that time period.
FORMER OBAMA ECONOMIST WARNS STAGFLATION THREAT LEVEL IS 'HIGHEST IN A LONG TIME'
President Joe Biden speaks about inflation and the economy on the White House campus on May 10, 2022. (Getty Images / Getty Images) "In March 2021, Congress passed the ARP, fueling consumer demand far above what the market could supply and even further above its would-be natural level," the report said. "The ARP’s last major round of stimulus was delivered three months after consumer spending had fully returned to pre-COVID levels, and its size equaled almost 300% of the estimated output gap over the subsequent three years." Inflation accelerated again in May, the government reported earlier this month, with the consumer price index rising by 8.6%, much higher than economists expected. It marks the fastest pace of inflation since December 1981, underscoring just how strong inflationary pressures in the economy still are. POWELL CONCEDES FED MAY TRIGGER RECESSION, CALLS SOFT LANDING 'VERY CHALLENGING' A man shops at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022. (Jim Watson/AFP via Getty Images / Getty Images) Scorching-hot inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food, gasoline and rent. The burden is disproportionately borne by low-income Americans whose already-stretched paychecks are heavily impacted by price fluctuations. Rampant inflation has become a major political liability for Biden ahead of the November midterm elections, during which Democrats are expected to lose their already razor-thin majorities. Surveys show Americans see inflation as the biggest problem facing the country. And many households blame Biden for the price spikes. The White House is taking steps ahead of the midterms to quell voter unrest over surging inflation by signaling that Biden understands what U.S. households are enduring – and that officials are maximizing efforts to bring prices under control. But Republicans said in the Friday report that the White House has made little effort to quantify the financial pain that inflation has imposed on millions of Americans, citing their own analysis that suggests the average household had to spend an extra $569 in April to afford the same amount of goods and services it bought in January 2021. GET FOX BUSINESS ON THE GO BY CLICKING HERE "American families will face these costs in perpetuity even after inflation returns to normal levels, as the inflation that has already occurred represents a permanent increase in the price level," the report said. "If prices were to completely stop increasing after April 2022, the price increases that already occurred would cost the average American household $6,829 over the following 12 months." Source: Read Full Article
