06.13.23

Biden’s Inflation Remains Painfully High As Senate Democrats Rubberstamp The Man Who Got It Disastrously Wrong

Jared Bernstein’s Policies Have Led To 26 Straight Months Of High Inflation Yet Senate Democrats Are Preparing To Promote Him

 

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “Since President Biden took office, consumer prices have risen more than 16 percent. American families are paying 20 percent more to put food on the table than they did in January 2021. And 36 percent more on energy. But over more than two years of Washington Democrats’ runaway inflation, President Biden’s top advisors have refused to even admit that there’s a problem – let alone that their policies are driving it. In early 2021, after Senate Democrats helped ram through the Administration’s reckless taxing and spending spree, one top White House advisor insisted that any inflationary effects would be ‘transitory.’ Eight months deeper into the Administration’s inflationary spiral, the same advisor insisted that inflation would be, quote, ‘growing half as fast a year from now.’ Another fanciful prediction overcome by the harsh, painful consequence of Washington Democrats’ reckless spending. And another instance when Jared Bernstein – President Biden’s choice to serve as Chair of the Council of Economic Advisors – was dead wrong on economic advice…. The nominee the Senate will consider this week can more accurately claim expertise in partisan warfare than economics. He’s been labeled in the press as President Biden’s ‘man on the Left.’ … [T]he American people cannot afford Jared Bernstein at the wheel of the CEA.” (Sen. McConnell, Remarks, 6/13/2023)

SENATE REPUBLICAN WHIP JOHN THUNE (R-SD): “Let’s be very clear. This is not a random situation that just happened to occur on the president's watch. The president bears direct responsibility for this inflation crisis, which was set off in large part thanks to the bloated big-government American Rescue Plan spending spree that Democrats and the president forced through shortly after the president came to office…. And contrary to what he’s suggesting in his op-ed, the president has done exactly nothing to bring down inflation since. Indeed, he’s continued to pursue the same kind of big-government, big-spending policies that helped land us in this mess in the first place. And so it’s frankly staggering to me that the president continues to have the audacity to say things like ‘hardworking families are reaping the rewards’ of his policies. Hardworking families are certainly reaping something from the president’s policies, but it isn’t rewards.” (Sen. Thune, Remarks, 6/13/2023)

 

Prices Rose 4% In May, Still Double The Target Inflation Rate, As ‘[C]ore Prices Remained High’

“The consumer-price index rose 4% in May from a year earlier, the Labor Department said Tuesday …” (The Wall Street Journal, 6/13/2023)

“Prices also rose 0.1 percent in May compared with the previous month.” (The Washington Post, 6/13/2023)

“[C]ore prices remained high last month, rising 0.4% from April to May, the sixth straight month of increases at that level or higher. Compared with a year ago, core inflation slipped to 5.3% from 5.5%. That is still far above the Fed’s target of 2%.” (The Associated Press, 6/13/2023)

‘[I]nflation Is Still Well Above Normal Levels, And The Looming Question Is Whether High Price Increases Will Become A Permanent Feature Of The Economy’

“[I]nflation is still well above normal levels, and the looming question is whether high price increases will become a permanent feature of the economy — or whether more economic pain is necessary for policymakers to root out persistent inflation.” (The Washington Post, 6/13/2023)

‘There Are Plenty Of Sources Of Inflation That Haven’t Been Tamed By The Fed’s Moves’

“May’s increase in inflation was driven by rising housing prices along with higher used vehicles and food prices, the Labor Department said.” (The Wall Street Journal, 6/13/2023)

“Still, there are plenty of sources of inflation that haven’t been tamed by the Fed’s moves…. [R]ent costs, which make up a large share of the consumer price index, continue to be a major driver of overall inflation. Rent isn’t expected to simmer down until the number of homes available significantly increases, or until cooling in the rest of the housing market trickles down to leases…. Used car prices, too, have also been on the rise over the past few months. Wholesale costs for used cars have been rising, and those increases are showing up in consumer prices.” (The Washington Post, 6/13/2023)

Americans Are Still Feeling The Sting Of Inflation During Every Trip To The Grocery Store

“US grocery prices ticked up in May … From April to May, adjusted for seasonal swings, grocery prices got 0.1% more expensive, according to the Bureau of Labor Statistics’ Consumer Price Index, a key measure of inflation. Overall, grocery prices were 5.8% more expensive in May than they were a year ago. Menu prices have risen 8.3% over the past year. Together, food prices jumped 6.7% throughout the year, once again outpacing overall annual inflation, which came in at 4%.” (“Grocery Prices Are Rising In America Again. Here’s What Got More Expensive,” CNN Business, 6/13/2023)

 

The Cumulative Effect Of Inflation Since President Biden Took Office Has Americans Paying Significantly Higher Prices For Food, Energy, Transportation, Housing, And More

Since President Biden took office, inflation has increased 16% (Bureau of Labor Statistics, Accessed 6/13/2023)

Americans Have Been Suffering From The Effects Of High Inflation For Over Two Years Now

May 2023 was the 26th straight month that year-over-year inflation was at least 4%, double the target rate of 2%. (Bureau of Labor Statistics, Accessed 6/13/2023)

 

To Combat Biden’s Inflation, The Fed Has Been Forced To Raise Interest Rates At The Fastest Pace Since The 1980s, And As A Result, ‘Consumers See Their Access To Credit Diminishing’ And ‘More US Small Businesses Reported Having Greater Difficulty Getting A Loan’

“To get inflation under control, the Federal Reserve has raised interest rates at a breakneck pace since March 2022. Those moves have brought the central bank’s benchmark rate, the federal funds rate, to between 5 and 5.25 percent — the highest level in 16 years.” (The Washington Post, 6/13/2023)

  • “The Fed has raised its benchmark rate by a hefty 5 percentage points over the past 15 months — the fastest pace of rate increases in four decades. Those hikes have led to much higher costs for mortgages, auto loans, credit cards and business borrowing.” (The Associated Press, 6/13/2023)

“At the same time, consumers see their access to credit diminishing. Those reporting that credit is much or somewhat harder to get than a year ago rose to 58.2%, the highest ever in a data series that goes back to June 2013. Likewise, the expectation that credit will be more difficult to get a year from now rose to nearly 53%, up from 48.8% in February.” (“Outlook For Credit Access Hits Record Low While Inflation Expectations Jump, NY Fed Survey Shows,” CNBC, 4/10/2023)

Small Businesses Are Feeling The Squeeze From Interest Rates And High Prices

“More US small businesses reported having greater difficulty getting a loan in March after multiple bank failures led to a further tightening of credit conditions. A net 9% of owners who borrow frequently said financing was harder to get compared to three months earlier, the most since December 2012, according to a survey from the National Federation of Independent Business out Tuesday. The same share expects tougher credit conditions in the next three months, matching the highest level in a decade.” (“US Small Businesses Face Worst Credit In A Decade After SVB,” Bloomberg, 4/11/2023)

  • “The National Small Business Association (NSBA) [in March] released a real-time poll of small businesses on the current state of lending in the U.S. Following the collapse of the Silicon Valley Bank—and even leading up to it—small businesses have seen lending standards tighten, creating ripple effects in their ability to maintain and grow their businesses. Earlier this week, NSBA surveyed more than 550 small-business owners, and here’s what we found: More than half of the small-business respondents to our poll say they are not able to obtain adequate financing.” (National Small Business Association, Press Release, 3/30/2023)

“The share of owners who say they believe the next three months will be a good time to expand fell to the lowest since 2009, the report showed. Firms also dialed back capital spending plans. One in five owners expect to invest in equipment or structures in the next three to six months, the smallest share in two years. Companies scaled back hiring plans and compensation as well.” (“US Small Businesses Face Worst Credit In A Decade After SVB,” Bloomberg, 4/11/2023)

“In Baltimore, Postman Plus Perry Hall is getting hits from all sides. The pack-and-ship store has seen costs of 250-foot rolls of bubble wrap nearly double. Transportation and shipping costs go up every few months … Owner Sharon Greenbeck has tried to absorb as much of the cost as possible. But looking at her small business, Greenbeck said it’s nearing time for her to pass higher prices onto her customers. She worries about how they will react.” (The Washington Post, 6/13/2023)

 

Meanwhile Senate Democrats Are About To Promote Jared Bernstein, ‘The Man Behind Bidenomics,’ Who Dismissed The Obvious Inflationary Effects Of Biden’s Reckless Spending Sprees

Senate Republicans: ‘His Comments During Our Hearing Only Further Demonstrated That Mr. Bernstein Would Be The Most Extreme Nominee We Have Ever Had For The Position Of Chair Of The Council Of Economic Advisers’

SEN. TIM SCOTT (R-SC), Senate Banking, Housing, And Urban Affairs Committee Ranking Member: “I have seen comments from my colleagues here in the Senate that sound the alarm for Mr. Bernstein. And to be frank, his comments during our hearing only further demonstrated that Mr. Bernstein would be the most extreme nominee we have ever had for the position of Chair of the Council of Economic Advisers. A role traditionally held by non-political economists…. [U]nfortunately, his largely partisan record of advocating for extreme progressive policy positions, including universal government-guaranteed jobs; universal government-run health care systems; higher taxes, including a carbon tax [and] a wealth tax; and the Green New Deal—deeply concern me.” (U.S. Senate Committee on Banking, Housing, and Urban Affairs Ranking Member, Press Release, 5/11/2023)

SEN. JOHN BARRASSO (R-WY), Senate Energy And Natural Resources Committee Ranking Member: “Mr. Bernstein’s nomination comes at a time when Americans are still paying more for energy than they should because of the wrongheaded policies of this administration. While most Americans long for the pre-Biden days when energy was affordable, Mr. Bernstein has different ideas. He likes high energy prices and thinks the rest of us should like them, too. In October of 2019, Mr. Bernstein wrote an article for Axios on energy and climate that praised the Green New Deal—a plan so radical no Senate Democrats could bring themselves to support it when it came to a vote that March. He wrote that ‘Fossil fuels are severely underpriced.’ Because of the policies he has advocated since joining the Biden Administration, Mr. Bernstein has gotten his wish—higher fuel prices…. Today families and businesses pay more than a dollar extra per gallon. It doesn’t end there. Heating oil is more expensive. Propane is more expensive. Natural gas is more expensive. Electricity is more expensive…. Instead of a green ideologue, we need a CEA Chair who understands the importance of, and is an advocate for affordable and reliable American energy—including oil, gas, and coal. Mr. Bernstein’s record clearly is in opposition to this idea. Mr. Bernstein is the wrong choice for this important post.” (Sen. Barrasso, Letter to Sens. Brown and Scott, 4/26/2023)

SEN. JOHN BOOZMAN (R-AR), Senate Agriculture, Nutrition, and Forestry Committee Ranking Member: “The administration’s attempts to pay for its priorities by increasing taxes on family farmers has been roundly rejected. The farm community rightly said ‘no’ to the president’s proposals to eliminate stepped-up basis, raise the death tax, limit like-kind exchanges and increase capital gains taxes. Now, President Biden wants the loudest cheerleader for this reckless tax and spend agenda to head the CEA. Jared Bernstein’s praise of Green New Deal programs and his zealous desire to raise taxes on family farmers are a threat to rural America’s future. Americans are struggling with historic inflation in food prices and farmers continue to see record-high input costs. Now is not the time to push policies that increase energy, fuel and other farm input costs as Mr. Bernstein would propose. I encourage the banking committee to reject his nomination.” (U.S. Senate Agriculture, Nutrition, and Forestry Committee Ranking Member, Press Release, 5/03/2023)

Jared Bernstein, President Biden’s Nominee To Chair The Council Of Economic Advisors, Has Been Described As Biden’s ‘Economic Brain’ And Early In The Administration Encouraged The White House To Ignore Serious Concerns About Inflation

Politico dubbed Jared Bernstein “The man behind Bidenomics.” (“The Man Behind Bidenomics,” Politico’s Playbook Deep Dive, 12/17/2021)

THE NEW REPUBLIC: “Biden has stacked his Council of Economic Advisers with three labor economists whose focus is on workers, not just markets: [Jared] Bernstein, who was most recently senior fellow at the left-leaning Center on Budget and Policy Priorities; Heather Boushey, a founder of the Washington Center for Equitable Growth, which focuses on inequality; and Cecilia Rouse, who left her post as a dean at Princeton to serve in the administration. This is the team pushing Biden not to kowtow to fearmongering about deficits and inflation.” (“The Progressive Trio Shaping Biden’s Ambitious Economic Policy,” The New Republic, 5/04/2021)

JARED BERNSTEIN: “Once this thing [Build Back Better] ramps up, it will increase and expand the economy’s productive capacity, by which I mean by standing up an accessible, affordable child- and elder-care sector…. Over the longer term, it eases the inflationary pressures. Over the near term, it doesn’t put upward pressure on inflation. In fact, it eases some of the costs that families face.” (“The Man Behind Bidenomics,” Politico, 12/17/2021)

Bernstein Has Repeatedly Said The White House Didn’t Miss Anything On Inflation

BERNSTEIN: “Well, first of all, we’re having an inflationary story in every advanced economy in the globe, and in fact, inflation is historically elevated everywhere. So it is certainly not just one country’s fiscal or monetary policy.”
CNBC’S ANDREW ROSS SORKIN: “But then the question is, what did the White House miss [on inflation]? And what is the lesson of that?”
BERNSTEIN: “I don’t think the White House missed much at all [on inflation]…” (CNBC’s “Squawk Box,” 6/13/2022)

SEN. JOHN KENNEDY (R-LA): “I’m going to run out of time. Are you telling me that when you said inflation was transitory, you were correct?”
BERNSTEIN: “No, I’m not saying I was correct or incorrect. What I’m saying was that was an ambiguous ...”
SEN. KENNEDY: “You were saying you were correct.”
BERNSTEIN: “No, I’m saying that that was an ambiguous and unclear word that was poorly chosen, I think, for that discussion, because it meant different things to different people.”
SEN. KENNEDY: “Well, has it been transitory?”
BERNSTEIN: “Inflation has, in fact, behaved much as I just described.” (Senate Banking, Housing, and Urban Affairs Committee Hearing, 4/18/2023)

Before President Biden Unleashed His First Reckless Spending Spree, Bernstein Dismissed The Inflationary Risks

BERNSTEIN: “I think [Larry Summers is] wrong. I think he is wrong in a pretty profound way about that -- about that claim in the following sense. And there’s a way in which Larry’s offering a warning that we’ve actually already heeded. So let me get into this a little bit. … But what Larry is worrying about here is inflation overheating. And right now we have inflation that’s been below the Fed’s target rate of 2 percent for well over a decade. And so we also have tremendous unused capacity in this economy. … That’s not overheating. It doesn’t mean there won’t be some heat. And where Larry got something importantly wrong, by the way, is by suggesting that the administration was being dismissive of any inflation -- potential inflationary pressures.” (CNN, 2/05/2021)

BERNSTEIN: “I mean, one thing is just wrong, which is that that our team is dismissive of inflationary risks. We’ve constantly argued that the risks of doing too little are far greater than the risk of going big, providing families and businesses with the relief they need to finally put this virus behind us. … I’m more concerned about…the damage that will do not just to their lives, but to the United States economy, to the productive capacity of the economy.  I’m more concerned about that than about the possibility which exists of higher inflation. So, this is risk management. This is balancing risks. And in our view, the risks of doing too little are far greater than the risks of doing too much. … The risk is a deflationary risk, which motivates us to go home — or to go big or to go home.  And the costs of inaction, of not addressing these risks, are too steep and too costly to these vulnerable — to these vulnerable groups, relative to the likelihood of overheating.  That’s the way I think about it.” (White House Press Briefing, 2/05/2021)

  • BERNSTEIN: “Yes. I think we have to distinguish between heat and overheat. So by overheating, Larry is talking about the possibility of inflation really taking off. Well, we have an unemployment rate that is almost twice what it was before this crisis. … And with inflation running well below 2%, which is the Federal Reserve’s target for almost a decade now. Again, we need to generate heat that’s not going to be overheat.” (CNN, 1/22/2021)

“Jared Bernstein, a member of Mr. Biden’s Council of Economic Advisers, said the administration believes the risks of high and persistent unemployment, hunger, eviction and other fallout from Covid-19 without stimulus outweigh the risks of inflation with stimulus.” (“Is Inflation a Risk? Not Now, but Some See Danger Ahead,” The Wall Street Journal, 3/01/2021)

After Biden’s First Reckless Spending Spree, Bernstein Called The Emerging Inflation Modest And ‘Transitory’

JARED BERNSTEIN AND ERNIE TEDESCHI: “We think the likeliest outlook over the next several months is for inflation to rise modestly due to the three temporary factors we discuss above, and to fade back to a lower pace thereafter as actual inflation begins to run more in line with longer-run expectations. Such a transitory rise in inflation would be consistent with some prior episodes in American history coming out of a pandemic or when the labor market has quickly shifted, such as demobilization from wars.” (“Pandemic Prices: Assessing Inflation In The Months And Years Ahead,” The White House, Release, 4/12/2021)

Even After More Than A Year Of Higher Inflation From Biden’s Reckless Spending, Bernstein Claimed The White House Should Not Pivot On Its Economic Policies

FOX NEWS’ BILL HEMMER: “Is it time for this White House and the Biden administration to pivot on its economic policies?”
JARED BERNSTEIN: “No…”
HEMMER: “I asked you that question and you said no. So are you saying no change? Are you saying no change in policy?”
BERNSTEIN: “Let me explain why, because the policies that we’re doing to help mitigate and ease price pressures are having effect.” (Fox News’ “America’s Newsroom,” 10/13/2022)

 

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SENATE REPUBLICAN COMMUNICATIONS CENTER

Related Issues: Economy, Taxes, Nominations, Inflation, Senate Democrats, Green New Deal