WASHINGTON — A White House that has long argued it wants to aid the middle class, rebuild infrastructure and combat climate change is now trying to tie its policy plans to the president’s most pressing political issue.
Lowering inflation.
Amid a surge in consumer prices, the Biden administration has made a concerted effort to convince the public that it is doing everything it can to ease inflation, pointing to a series of steps it has already taken — and those it hopes to take in the near future — to tackle a problem that has weakened voters’ confidence in the economy.
The all-out messaging blitz is an indication of how the White House sees rising prices as both an economic and political problem, even as a broad range of economists question how much the administration can do in the short term to bring inflation under control.
The president has peppered his Twitter account with mentions of inflation or rising prices, bringing up one or the other nine times since Friday. And his approval rating has also been taking a beating in recent polls, partly due to rising prices.
“Everything from a gallon of gas to loaf of bread costs more. And it’s worrisome, even though wages are going up,” Biden said during a speech last week in Baltimore. “We still face challenges, and we have to tackle them. We have to tackle them head on.”
The president and other top administration officials have latched onto nearly everything they can to argue they’re combating inflation. Commerce Secretary Gina Raimondo, for instance, has argued that a trade deal struck last month with the European Union will ease pressure on rising costs. Treasury Secretary Janet Yellen has added that future trade deals, including with China, could do the same.
Administration officials have said that a nearly $2 trillion spending package under consideration in Congress could curtail rising costs by bringing more women into the workforce. And the White House has made the infrastructure bill, which Biden signed into law Monday, a focal point of its anti-inflation agenda, emphasizing how investments in the nation’s ports could reduce rampant supply-chain disruptions in both the short and long run.
White House officials have also cited efforts to combat the coronavirus pandemic to argue that it is doing all it can to ease rising prices.
“No one is denying that inflation and any, any element of raising costs is an issue for the American people,” White House press secretary Jen Psaki said Monday. “We’re proposing solutions. In the short term, we have to continue to get COVID under control. In the medium and long term we want to pass this agenda, which economists will tell you, including Nobel laureates, this will help address inflationary issues over the long term.”
White House officials say part of their efforts include the implementation of policies that don’t directly reduce inflation but give money to families hit the hardest, such as with the child tax credit program.
CONFIDENCE PLUMMETS
Democratic strategists acknowledge that rising prices have become a top concern for voters, crowding out otherwise positive news about jobs and economic growth.
The erosion of confidence is evident in polls: Last week, the University of Michigan Consumer Sentiment Index hit a 10-year low, in part because of escalating fears of inflation.
“In every single focus group I’ve been in three months, the cost of living rises to the top of the discussion,” said Patrick McHugh, a Democratic strategist. “This is not some academic argument happening in Washington, DC. People think that the cost of living has really increased, and they’re not happy about it.”
Those fears come at a time when Biden’s own approval ratings are slipping, especially on his handling of the economy.
Only 39% of adults approve of how the president has dealt with the economy, according to a Washington Post/ABC News poll released this week, while 55% disapprove — a 6-point swing from the same poll in September, when 45% of Americans approved of him on the economy and 49% did not.
The president’s overall approval rating stood at 41% in the survey, with 53% disapproving, a new low in the poll.
Biden has acknowledged concern about rising prices repeatedly. Last week, he issued a rare statement in response to a Labor Department report that consumer prices had jumped 6.2% in October compared to a year earlier, the largest increase in more than 30 years.
“Almost every single inflation metric that we can track readily has popped in recent months,” Brent Meyer, a research economist and assistant vice president at the Federal Reserve Bank of Atlanta, told McClatchy, noting the 30-year high.
“These are astronomical numbers and that reflects broad-based underlying price pressure,” Meyer said. “We’ve moved beyond purely pandemic induced relative price changes. What we’re seeing now is really broad-based price pressure across all categories of the economy.”
Meyer said businesses are anticipating labor shortages and supply chain disruptions to continue, which could mean higher prices will persist into 2022 or even 2023.
Republicans have seized on inflation as a winning issue, predicting that it will help them to big wins in next year’s midterm elections. They say the administration’s policies have only worsened, not improved, inflation.
“The president has no plan to tackle inflation,” said GOP Sen. John Barrasso of Wyoming. “His tax and spending spree will only pour fuel onto that fire.”
WHAT ECONOMISTS SAY
White House officials have repeatedly cited a letter from 17 Nobel laureates saying that the legislative agenda would reduce inflationary pressures.
But other economists say they are skeptical that Biden’s policies will do much to temper rising prices, especially in the short run.
“As far as what the president can do? Not a whole lot,” said Connel Fullenkamp, economics professor at Duke University.
“You can’t legislate logistics,” he said. “You just can’t snap your fingers and make tens of thousands of storage containers on the West Coast go back to China and be filled with the stuff everybody wants.”
White House officials have blamed supply-chain disruptions, caused by an economy emerging from its coronavirus-related downturn, as the primary force behind rising prices.
They’ve argued the new infrastructure law will ease those concerns, but economists warn it could take years for that to happen.
“I don’t think investments in infrastructure can address prices next month,” said Donna Ginther, professor of Economics at University of Kansas. “In the long run, having investments in infrastructure will increase the productive capacity of the country … but it won’t happen overnight.”
Economists say that dealing with the pandemic is likely the best way to reduce inflationary pressure in the short term.
“The fact of the matter is, if we want to talk about inflation, it really is talking about dealing with COVID,” said Kent Smetters, an economics professor at the University of Pennsylvania’s Wharton School. “That is the driver here. And everything else is a sideshow, or it’s something that is a Federal Reserve problem over time instead of a fiscal problem.”
