🎙️ Voice is AI-generated. Inconsistencies may occur.
President Joe Biden keeps trying to blame Russian President Vladimir Putin for the highest inflation in more than 40 years. Unfortunately for Biden, the American people aren't falling for that spin. If he wants to reverse his political fortunes, he should abandon current policies that will only drive prices even higher and work to get spending and federal regulations under control.
A recent poll conducted by Public Opinion Strategies for Americans for Prosperity found that 61 percent of registered voters think the president and his policies deserve at least some blame for higher prices, with a sizable 40 percent saying he deserves "a lot" of blame. Voters also believe that government policies are causing price hikes on everything from gas (80 percent) to food (76 percent) to health care (74 percent) to home energy (73 percent).
The voters are right.
Between COVID aid from Congress, the Federal Reserve's asset buying program and other administrative actions, Washington has pumped more than $10 trillion into the economy since the pandemic began. And this does not even count the $550 billion in new infrastructure spending or the president's tax-and-spend budget that would suppress growth, fuel inflation and lead to record levels of federal debt over the next decade. In fact, the Congressional Budget Office projects government spending under the president's budget would grow to 23.4 percent of GDP—far above the historical average of 20.9 percent.
Despite the president's attempt to blame Russia's invasion of Ukraine, the stage was set long ago for a dramatic and long-lasting acceleration of inflation—as economists of his own party warned. A recent study by the San Francisco Federal Reserve Bank examined why U.S. inflation outpaced the levels in other developed countries. It found that the tsunami of spending during the pandemic—including the president's $1.9 trillion American Rescue Plan—"may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021."
The Public Opinion Strategies poll showed 74 percent of voters believe that continued high levels of government spending in Washington would cause prices to continue rising. Yet despite public opposition and a mountain of evidence that government spending has been a major contributor to inflation, the president insists even more spending is the solution. So he continues pushing his inflationary Build Back Better scheme that has trillions in new spending and tax hikes, which would add to the $433 monthly "inflation tax" Americans are already paying.
The president needs to change course, because his policies will only make things worse. Take infrastructure, for example. Recent administration actions on domestic steel and environmental reviews will result in fewer, costlier infrastructure and energy projects.
The White House recently finalized "Phase 1" of undoing a Trump-era rule limiting environmental reviews to impacts that are a direct result of a project; for example, how a bridge might impact the river beneath it. By returning to a needlessly extensive and bureaucratic review process, the Biden administration is making it harder and more expensive to improve American infrastructure.
And building transportation projects requires lots of steel, which is expensive due to tariffs instituted by President Trump. The Biden administration could have lifted those tariffs, but instead decided to replace them with a quota system. By doubling down on restrictive trade practices, the administration will lock in high steel prices, making every infrastructure project that uses steel cost more than it should.
No consumer would ever purposely inflate the cost of a home renovation, a new driveway or a landscaping project the way the government does infrastructure. The result will be Americans paying more for roads and bridges and getting fewer of them.
Instead of pursuing policies that raise costs, the president should instead commit to reducing the government spending and costly regulations that are driving inflation higher. For starters, that means abandoning Build Back Better; making it easier to develop, produce and transport energy; removing the regulations that prevent us from modernizing infrastructure and reducing federal deficits by getting spending under control.
Akash Chougule is vice president of Americans for Prosperity.
The views expressed in this article are the writer's own.
