In the days leading up to the release of the US Department of Labor’s latest inflation report, the White House tried to lower expectations. White House officials say they expect inflation to be “extremely high” in March due to soaring gas prices, driven largely by the war in Ukraine.
Unfortunately for Joe Biden and his fellow Democrats, they were right. The inflation report released on Tuesday showed that prices in the United States increased by 8.5% between March 2021 and March 2022 – the highest level of inflation in the United States since 1981.
The White House tried to downplay fears last year, arguing that price increases were caused by the coronavirus pandemic and would be “transient.” Now, more than a year after vaccines became widely available, Democrats are struggling to help families battling inflation. Centrists and progressives warn that if Democrats do not come up with an effective plan, Republicans could be on track for a historic victory this November.
The prospects for the Democrats in the midterm elections were already considered weak at best. The president’s party usually loses seats, especially the House, in the medium term. Democrats have very little room for error, given the weak majority. Biden’s approval rating, in the low 40s for months, doesn’t help.
Republicans are well aware of the opportunity they have. On Tuesday, hours after the report on inflation was published, Senate Minority Leader Mitch McConnell said that “the atmosphere for Republicans is better than in 1994” – when the party dropped eight seats in the Senate and won a network of 54 seats. in the Chamber.
“From an atmospheric point of view, this is a perfect storm of problems for Democrats, because this is a fully democratic government,” McConnell said.
Voters’ concerns about inflation are certainly contributing to the electoral woes of Democrats. A CNB poll this month found that 48 percent of Americans chose inflation as the number one or two problem the country faces, making it the most common response among respondents.
“This issue is of paramount importance to voters,” said Kelly Dietrich, chief executive of the National Committee for Democratic Training, which trains candidates. “I think it will stay on top of my mind because it affects them directly every day. And successful candidates have to deal with it directly. “
The White House has tried to deflect criticism of inflation by blaming Vladimir Putin for high gas prices and the war in Ukraine. Speaking in Menlo, Iowa, on Tuesday, Biden noted that more than half of inflation in March was caused by rising gas prices.
“Even while we’re working with Congress, I won’t wait to take action to help American families,” Biden said. “I am doing everything in my power, through executive orders, to lower prices and deal with Putin’s rising prices.
Joe Biden promises to do everything he can to lower prices when he visits Menlo, Iowa, last week. Photo: Carolyn Castor / AP
Biden has indeed taken steps to curb gas prices. He announced on Tuesday that his administration would approve an urgent refusal to expand the use of biofuels, and he promised to release a million barrels a day from the US Strategic Oil Reserve over the next six months.
But the country’s rise in prices extends far beyond gasoline, and economists warn that inflation is likely to remain high in the coming months.
Ostan Gulsby, a professor of economics at the University of Chicago who chaired the Council of Economic Advisers under Barack Obama, said: “There are two questions. One is, is this peak inflation? But even if it is peak inflation and the numbers are falling, what will it come down to?
Goolsbee noted that so-called “core inflation,” which excludes more volatile gas and food prices, rose just 0.3 percent last month. This increase was less than most economists had expected, providing some hope for cooling inflation in the near future.
“It was a welcome surprise, but I don’t think anyone should be joking,” Gulsby said. “There is a long way to go to prices where inflation will be considered normal.
For Democrats, this possibility means that their approach needs to change. Instead of arguing that the price increase will be temporary, Democrats acknowledge the reality of tight budgets and try to argue how they can help.
“The good news is that the entire Democratic Party is very focused on inflation,” said Gabe Horwitz, senior vice president of the economic program at Third Way, a center-left think tank. “Last year we passed a long time when there was a question whether this will be temporary or not. It’s here, it’s real, it looks like it will stay for a while. “
As Democrats look forward to November, strategists are urging candidates to present an economic vision that will both improve the finances of working Americans and mobilize voters.
“First and foremost, American families need help,” Dietrich said. “Second, to help them more, Democrats need more victories, to improve our position, to continue these policies.”
But implementing these policies has proved difficult. The Build Back Better Act, a $ 1.9 billion package that included provisions for lower health care and child care, has stalled in the Senate amid opposition from Joe Manchin, a centrist Democrat.
The West Virginia senator was outspoken about his frustration with high inflation, criticizing his fellow Democrats for calling for more spending.
Buyers bought gasoline at a Shell station in Bethesda, Maryland, last week. The war in Ukraine has contributed to a sharp rise in gas prices. Photo: Jim Lo Scalzo / EPA
“Here’s the truth: we can’t make our way to a balanced, healthy economy and continue to add $ 30 trillion to our national debt,” Manchin said Tuesday in response to the latest inflation report.
Manchin’s position has outraged progressives, who have insisted that high inflation underscores the urgent need to switch to Build Back Better and help families.
“American prices are falling. Inflation is hitting the end result, and every politician’s number one task is to raise the standard of living of his constituents, “said Joseph Givargese, executive director of the progressive group Our Revolution.
Looking ahead to the interim terms, Guevargese added: “I think it will be very difficult to win. And then you have the obstructionists who make it difficult for the president and our party to win. “
Horwitz said he remained optimistic that Democrats would be able to pass on a version of Build Back Better that would cut costs for families. Manchin said he would be open to a proposal if it did not increase the federal deficit. This will require Democrats to further cut spending, but could give them a victory to sell to voters.
“You can do both,” Horwitz said. “You can have a plan that raises a significant amount of money by changing the tax code, and you can use some of that money to pay off debt and deficits. And you can use some of that money for programs that ease inflation and help consumers.
“It’s not a crash, but it’s something that can happen. Over the next two months, we’ll find out more about how likely this is.
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