In the News

Biden claims 40-cent gas price drop makes up for ‘unacceptably high’ inflation

Callie Patteson, New York Post

Washington, DC, July 13, 2022

President Biden admitted Wednesday that inflation was “unacceptably high” after the annual rate of price increases surged to 9.1% in June — the highest level since November 1981 — but then tried to brush off concerns about it, citing an incremental drop in gas prices.

Biden also tried to deflect from the worse-than-expected figure by noting that it was “out of date” — something that can be said of every economic report by the time it is released.

“Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June,” Biden said in a statement shortly after he arrived in Israel.

“Those savings are providing important breathing room for American families,” Biden insisted. “And, other commodities like wheat have fallen sharply since this report.”

The average price of regular US gas remains near record highs at $4.63 per gallon, according to AAA, after topping $5 in mid-June.

Biden’s statement proceeded to call on Congress to approve legislation to combat inflation — making an apparent reference to his stalled $2 trillion Build Back Better Act, which critics say actually would worsen rather than fix the problem.

“I will urge Congress to act, this month, on legislation to reduce the cost of everyday expenses that are hitting American families, from prescription drugs to utility bills to health insurance premiums and to make more in America,” Biden said.

The new inflation report contained troubling news that price increases are broadly felt, rather than isolated to oil and grain costs that increased during Russia’s nearly five-month invasion of Ukraine.

The Bureau of Labor Statistics found that so-called “core inflation,” which measures the cost of all items minus food and energy, rose 0.7% in June after increasing 0.6% in April and May — a total spike of 5.9% over June of last year.

The White House tried to get ahead of the bad news with press secretary Karine Jean-Pierre saying Monday that the administration expected the reading to be “highly elevated.” But the 9.1% rate exceeded even economist predictions of about 8.8%.

The annual US inflation rate was 8.6% in May, up from 8.3% in April after gradually rising during Biden’s first year in office.

Inflation in the US is worse than in many other Western countries. The average Eurozone inflation rate was 8.6% in June — slightly lower than in the US despite greater economic impacts from the Russia-Ukraine war.

Republican lawmakers lambasted the administration after the report’s release, while centrist Democrats rebuffed Biden’s call for Congress to dust off his stalled social-spending plan.

In the House, GOP leaders introduced the REIN IN Inflation Act that would require presidents to publish inflation-impact assessments before taking certain executive actions involving spending.

“President Biden has demonstrated that he neither cares about, nor is willing to address, the record high inflation affecting American families, which has risen 13.8% since Joe Biden took office,” said Rep. Jason Smith (R-Mo.), the top Republican on the House Budget Committee, in a statement announcing the bill

No. 3 House Republican, Rep. Elise Stefanik (R-NY), an original co-sponsor of the bill, said it would “ensure this administration takes into account the harmful impact of their policies that worsen this inflation crisis and drive up prices of goods, gas, and groceries.”

Critics fear the potential impact on inflation of various looming Biden actions, such as potentially forgiving vast amounts of student loan debt.

Sen. Joe Manchin (D-WV) said Wednesday he would resist Biden’s call for greater spending because it would add “more fuel to this inflation fire.”

Amazon and Washington Post owner Jeff Bezos said in May that Manchin “saved” the country from even worse inflation by blocking Biden’s roughly $2 trillion budget reconciliation bill in the evenly divided Senate.

Biden’s $1.9 trillion American Rescue Plan Act, which passed without any Republican support shortly after he took office, often is blamed as one of the causes of high inflation.

A study released in late March by researchers at the Federal Reserve Bank of San Francisco said that in the final quarter of 2021, about 3 percentage points of US inflation — or roughly half of it at the time — may have been caused by government pandemic spending.

The Rescue Plan Act included $350 billion for state and local governments to disperse, $1,400 stimulus checks for most Americans and boosts to child tax credits and unemployment pay, among other provisions.

Biden in November admitted that the legislation likely had some effect on rising prices.

“The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,” Biden said, adding, “It changes people’s lives. But what happens if there’s nothing to buy and you got more money to compete for getting [goods]? It creates a real problem.”

Inflation is dragging on Biden’s approval rating, which has hit a new low of 33%, according to a New York Times poll released Monday, and Republicans hope to ride the issue to a landslide victory in the November midterm elections for Congress.

“Democrats don’t care about things that matter to everyday working Americans such as inflation, a border crisis, gas prices or violent crime, they only care about the pet issues of their white, affluent & liberal donors & activists,” Sen. Marco Rubio (R-Fla.) said in response to the latest figures.

“New report: inflation hits a nearly 41-year high,” wrote Sen. John Thune (R-SD). “Groceries, gas, rent, utilities – almost everything is more expensive these days, & Americans are feeling the pain daily. This level of inflation is a direct result of Dems’ spending since they’ve taken control in DC.”

“Inflation continued to skyrocket in June because of Joe Biden’s reckless spending,” Sen. Marsha Blackburn (R-Tenn.) chimed in. “Inflation rose to a historic 9.1%, the highest level since 1981.”

“Inflation is up 9.1% – a fresh 40-year high. And what are Democrats doing to help suffering Americans? Pouring gasoline on the fire by revitalizing Joe Biden’s trillion dollar spending plan,” said Rep. Tom Tiffany (R-Wis.).

Rep. Brian Mast (R-Fla.) called June’s record numbers a “wake up call” for Biden and his Democratic colleagues to shift their agenda in Congress.

“Inflation is up to 9.1%, the highest in my lifetime,” he posted. “Out of control spending dug this hole. First rule of getting out of a hole? Stop digging. This has to be the wake up call for Joe Biden & DC Democrats: stop putting your liberal agenda ahead of the well-being of Americans.”

Rep. Claudia Tenney (R-NY) also directed her ire at Democrats in Congress Wednesday, saying, “Bidenflation continues to skyrocket. The latest report out today shows costs are up a whopping 9.1%! And even now, Democrats in Congress still want to spend more of your money and increase taxes on job creators and families.”

“It’s even worse than expected,” Rep Greg Murphy (R-NC) tweeted. “#Bidenflation has hit a new record high with #CPI hitting 9.1% (y/y). Too many dollars are chasing too few goods, and yet liberal Democrats are still plotting billions in new tax hikes.”

“The Biden Administration continues to break records: June inflation hit an unfathomable 9.1%,” Rep. Kevin Hern (R-Okla.) said. “While @POTUS will continue to blame businesses & foreign wars, the American people know that his policies are responsible for the pain they’re feeling everyday.”

“Remember, this didn’t just happen,” Sen. Ron Johnson (R-Wis.) tweeted. “This destructive inflation has been caused by Democrat’s war on fossil fuels and massive deficit spending. Biden and his enablers in Congress must be stopped.”

Sen. Bill Cassidy (R-La.) agreed, writing: “Inflation was up 9.1% in June. Americans are suffering from Biden’s disastrous economic agenda. The last thing Americans need is a Democrat-imposed tax hike and more reckless spending.”