Republican Senate leaders on Tuesday railed against rising US inflation rates, blaming the price increases on the flood of money from a pandemic stimulus package pushed by Democratic President Joe Biden earlier this year.
Senate Minority Leader Mitch McConnell used the recent rise in prices seen as the American economy has reopened to argue against Biden’s new spending plans for infrastructure and social programs.
“The country’s awash in inflation. The country is flooded with money. The last thing we need to do is to pile on with another massive reckless tax and spending spree,” McConnell said at a press conference.
“Gas prices are over $3 a gallon in every state in the union. There’s no relief in sight. It’s a direct result of flooding the country with money,” he said.
Consumer prices jumped 5.4 percent in September compared to a year earlier, half of which was due to rising food and housing prices, according to government data.
Rising global energy prices also have taken a toll, with oil topping $80 a barrel for the first time in years.
Consumers have rushed to buy homes, cars and other products in a surge of demand as the worst days of the pandemic have passed, while supply challenges such as the scarcity of computer chips, shipping containers and truck drivers have increased costs.
US Treasury Secretary Janet Yellen has argued that the spike in inflation is mostly “transitory” but that it could last for some time given the “unprecedented shock to the global economy.”
But she also said employers who are struggling to find workers to fill open positions may have to raise wages — which could also feed inflation.
Federal Reserve Chair Jerome Powell has repeatedly said that price pressures will fade somewhat as pandemic effects are worked out, and that the central bank can act against inflation, if necessary.
McConnell has argued the nearly $2 trillion American Rescue Plan enacted in March was excessive, though many economists credit the stimulus with preventing a worse economic crisis.
Biden’s Democrats are working through their differences over two spending packages, one that includes $1.2 trillion for infrastructure and another allocating about $2 billion for social programs, which they intend to pay for through new taxes.
Senate leader Chuck Schumer, who presides over the razor-thin Democratic majority in the chamber, expressed confidence that the programs will win approval.
“I believe that we will get this done, and we will get it done soon,” he told reporters. “I know that Democrats in both chambers are working really hard to get this consequential, desperately needed legislation across the finish line.”