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Biden advisers say pandemic, not policies, fueling inflation

EconomyNov 14, 2021 07:40PM ET
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© Reuters. FILE PHOTO: Shoppers browse in a supermarket while wearing masks to help slow the spread of coronavirus disease (COVID-19) in north St. Louis, Missouri, U.S. April 4, 2020. REUTERS/Lawrence Bryant/File Photo

By Doina Chiacu

WASHINGTON (Reuters) -U.S. President Joe Biden's economic advisers defended his policies on Sunday amid rising inflation that they said was a global issue related to the COVID-19 pandemic, not a result of the administration's programs.

U.S. consumer prices last week posted their biggest annual gain in 31 years, driven by surges in the cost of gasoline and other goods. Republicans have pounced on inflation worries, claiming that the increase reflects Biden's sweeping spending agenda.

"There's no doubt inflation is high right now. It's affecting Americans' pocketbooks. It's affecting their outlook," Brian Deese, director of the White House National Economic Council, said on NBC's "Meet the Press." "But it's important that we put this in context. When the president took office, we were facing an all-out economic crisis."

The United States is hardly alone in enduring a bout of stiff inflation, with the Organization for Economic Cooperation and Development showing inflation running high across its 38 member countries and oil prices quadrupling in the last 18 months as economies reopened from COVID-19 shutdowns.

On Monday, Biden is scheduled to sign a $1 trillion bipartisan infrastructure bill that is expected to create jobs across the country by dispersing billions of dollars to state and local governments to fix crumbling bridges and roads, and expanding broadband internet access to millions of Americans.

Treasury Secretary Janet Yellen and Deese in separate television appearances said they expect that measure, as well as the $1.75 trillion "Build Back Better" domestic spending and climate investment bill to help bring down inflation.

"There's an urgency to act," Deese said on CNN.

Deese said he was confident that House of Representatives Speaker Nancy Pelosi would bring the "Build Back Better" bill to a vote this week. That, however, will only be a first step as the Senate has not yet taken up the bill, and Democratic divisions could threaten its chances in that chamber.

Senate Majority Leader Chuck Schumer in an open letter to fellow Democrats on Sunday said his chamber will not take up the bill until the House passes it. Congress faces an extremely crowded agenda in the month ahead as it also needs to avert an economically catastrophic debt default by the federal government and a partial government shutdown that would be politically embarrassing for Democrats.

SLIDING APPROVAL

High inflation is eroding wage gains, adding to political risk for Biden, whose approval rating has been falling as Americans grow more anxious about the economy. Broadening inflationary pressures could also complicate the Federal Reserve's communication. The Fed this month restated that high inflation is "expected to be transitory."

"The problem is the Democrats are now saying we want to go all in with this massive tax and spending bill," Republican Senator John Barrasso said on ABC's "This Week." "People are going to pay higher prices."

The White House regularly cites support for the Build Back Better plan from 17 Nobel laureates who say it will ease longer-term inflation.

Biden's $1.9 trillion American Rescue Plan stimulus package in March helped Americans weather the pandemic and today spending is strong and demand is strong, Yellen said on CBS' "Face the Nation."

However, the supply of goods and of workers remains low, she noted, and the federal government is scrambling to unblock global supply chains affected by the pandemic.

Yellen has said she expects prices to go back to normal by the second half of next year if the pandemic continues to wane.

"The pandemic has been calling the shots for the economy and for inflation," Yellen said. "And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do."

Biden and his top economic advisers have for months predicted that inflation would be a short-term problem.

Asked on CNN's "State of the Union" if they were wrong, Deese said, "No, I don't think so" and pointed to the strength of the U.S. economic recovery.

Former Treasury Secretary Larry Summers, a Democrat who warned in February the American Rescue Plan could fuel inflation, said on Sunday he supported both the infrastructure and Build Back Better bills because they make long-term investments.

"We will sacrifice our country's future ...and we won't make any meaningful contribution to reducing inflation, if we vote down this bill," Summers said on CNN's "Fareed Zakaria GPS."

Biden advisers say pandemic, not policies, fueling inflation
 

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Comments (61)
Ayumastura PinkLady
Ayumastura PinkLady Nov 15, 2021 1:44AM ET
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"second half of next year".. just enjoy the rally till market do some correction early next year.
Kevin Avila
Kevin Avila Nov 14, 2021 11:13PM ET
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No rate hike = “Let them eat cake!”
Joe Bagholder
Joe Bagholder Nov 14, 2021 10:30PM ET
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Nobody believes that, half of all dollars in existence printed since pandemic started. Shutting down pipelines and canceling permits is raising fuel prices which in turn raise everything's price.
Young Money
Young Money Nov 14, 2021 10:30PM ET
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Nothing to do with us output
Catholic Man
CatholicMan Nov 14, 2021 10:15PM ET
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LOL
Ethel Basset
Ethel Basset Nov 14, 2021 9:41PM ET
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LOL! They think we are stupid.
Vlad Lozovskiy
Vlad Lozovskiy Nov 14, 2021 9:11PM ET
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Well duuuuuuhh!!!  They wouldn't say they sukc big time!
David Gentle
David Gentle Nov 14, 2021 8:09PM ET
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the pandemic didn't cause inflation, the governments response to the pandemic caused inflation. no shutdown, no mandates, no stimulus equals no inflation. in fact the lack of those three actions during the pandemic would have caused deflation. imagine that.
Erski Gumby
SB20 Nov 14, 2021 8:09PM ET
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Lesko Brandon Believe it or not, that actually ***es the democrats in FL. They hate Desantis for keeping them safe and keeping them employed.
Josh Davis
Josh Davis Nov 14, 2021 8:09PM ET
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Erski Gumby hes allowing the mandates to continue which is why i left for texas to work in healthcare. He was supposed ro protect us since we protected a nation for over a year….he failed i used to love desantis too
peter neal
peter neal Nov 14, 2021 8:08PM ET
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Buy Gold and get ready for the Biggest Reset in History.
Sabi Sab
SabiSab Nov 14, 2021 8:00PM ET
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Stop blaming everything on the pandemic, it's getting really old!
John Hat
John Hat Nov 14, 2021 7:53PM ET
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LGB
Parekh Kar
Parekh Kar Nov 14, 2021 7:49PM ET
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yes bcz policy makers have lost their soul
Ryan Paschall
Ryan Paschall Nov 14, 2021 7:04PM ET
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so many products are oil based. have fun paying more for everything
palmer gossett
palmer gossett Nov 14, 2021 6:27PM ET
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look at all of the tankers in the ports, and beyond. There's no supply issue. There are policies in place preventing these goods from being delivered. Blame California bad policies for starters
Frank Francone
Frank Francone Nov 14, 2021 6:26PM ET
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Print more please
no spin
no spin Nov 14, 2021 6:25PM ET
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Fuel prices effect everything . That's why your groceries are up 12% at least . We know this. Highest gas prices in 7 years . Thank Biden I must say this administration has exceeded my expectations. I thought it would take them 2 years to destroy the country. There way ahead of schedule.
palmer gossett
palmer gossett Nov 14, 2021 6:22PM ET
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they're doing it on purpose
Jose Cabreja
Jose Cabreja Nov 14, 2021 6:05PM ET
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🤡🤡🤡
Ac Tektrader
Ac Tektrader Nov 14, 2021 5:32PM ET
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this distorted view of deficits by people that don't know what their taking about has always interested me. debt and deficits used to be compared with assets and the ability to to pay, and if the money is being invested and what the long term return is. most of this money being spent is an investment in necessary goods and services to make America more productive and create more wealth. America has gone through periods of rebuilding before with both the Republicans and the Democrats Administrations. We didn't listen to right wing conservatives in both parties in the past, why should we do it now ....they are always wrong.
Samantha Sa
Samantha Sa Nov 14, 2021 5:32PM ET
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I would have been okay with student debt cancellation for nurses, doctors, teachers, mental health workers in under served areas, primarily rural and low-income urban neighborhoods. That didn't happen. I am not okay with the build back better plan that simply extends debt cancellation to civil servants who already benefit from matching funds in their 401Ks subsidized by tax payers. I also feel it is unfair to subsidize anyone else's EV purchase.
Co Gonz
Co Gonz Nov 14, 2021 5:32PM ET
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government and private markets switch back and forth to keep economy going- government isn't efficient with anything they do- stimulus by Taylor rule is meant to fill output gap- anything more creates inflation and will put more strain on supply chains
Bill Melton
Bill Melton Nov 14, 2021 5:32PM ET
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Another incorrect rationalization. FYI - The national debt is. ases on cash accounting basis; i.e., debts that are due within fiscal year. If government waa using accrual accounting method, where revenue or expenses are recorded when a transaction occurs rather than when payment is received or made,tbe national debt is estimated to be 4 or 5 times worse. This is a serious situation.
Michael Angelo
Michael Angelo Nov 14, 2021 5:29PM ET
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Denying inflation by Biden looks Trump's denial about covid, remember. Will disappear alone... magic... Well think about next elections, the boomerang is lock and load. Are they using the same manual?
Bill Melton
Bill Melton Nov 14, 2021 5:24PM ET
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Did he read that from a script or was that another uncontrollable *****that was mistaken for him trying to sound coherent?
George Jetson
George Jetson Nov 14, 2021 3:39PM ET
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what? oh yeh, domestic ag supply was not a result of US keynesian economics. government simply don't go from supply side to"demand side"
Samantha Sa
Samantha Sa Nov 14, 2021 3:31PM ET
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Neocons believe the answer to everything is eliminating taxes. As if revenue isn't necessary for defense and essential government services. Liberals believe the answer to everything is to spend more with marginal tax increases that as much contribute to deficit spending. Both ideologies have necessitated raising the debt ceiling. Repeatedly and from one administration to the next. This includes when the debt ceiling was raised twice during the Trump administration. Appointments to the Federal Reserve and Treasury, typically approved with bipartisan support in Senate confirmations, don't stand in anyone's way for deficit spending and actively promote more borrowing and spending regardless of motivating ideology in the political landscape.
New Jazenevd
New Jazenevd Nov 14, 2021 3:22PM ET
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Biden means stagflation. Stupidity is the most destructive weapon.
Ac Tektrader
Ac Tektrader Nov 14, 2021 3:22PM ET
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new jazenevd..blaming Bidon for stagflation is premature and very disingenuous he hasn't been president long enough to have any real effect on America's economy. We are not in a stagflation environment...we are in an inflationary environment... whether it develops into stagflation is yet to be seen.
Ac Tektrader
Ac Tektrader Nov 14, 2021 3:22PM ET
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new jazenevd..your post is a demonstration of trying to weaponize stupidity and ignorance.
New Jazenevd
New Jazenevd Nov 14, 2021 3:22PM ET
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Ac Tektrader  Inflation now, stagflation later. Quite simple projection. Stupidity is also clear enough.
Christopher Bergner
Bugsy_South_UK Nov 14, 2021 3:07PM ET
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Why would you get inflation when you print 3 Trillion Dollars? etc etc.  In reality the Dollar is toast.  Problem is no one wants to blink first!  In reality Gold should be astronomical in Dollars, it is only manipulation that has kept the price down, but can that be maintained forever???
John Cerniuk
John Cerniuk Nov 14, 2021 3:07PM ET
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over 16 trillion worldwide about 18% of the GDP what could go wrong ?
Tom Sc
Tom Sc Nov 14, 2021 2:58PM ET
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it's funny because most of the response to the pandemic was initiated by Trump or when he was president. you can argue about the spending bills Biden is passing but if those do not go through we are talking about a depression. and that's valid but this is the reality of it
Show previous replies (2)
Tom Sc
Tom Sc Nov 14, 2021 2:58PM ET
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putting rates to zero, swap lines, repos, liquidity/fiscal policy in general takes months and sometimes up to a couple years to work through the economy. this is ultimately why inflation will be difficult to stop because nothing you can do does anything immediately, when you see it it's too late.
Tom Sc
Tom Sc Nov 14, 2021 2:58PM ET
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let's all remember Trump wanted more, he wanted rates sub zero and more stimulus cheques. I dont really see much of a difference between Biden and Trump in this regard but hey let's not let facts get in the way
Joe Fred
Joe Fred Nov 14, 2021 2:58PM ET
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The incoming administrations all do the same things…”the bad stuff is from the other guy, the good from me.” I would add that it is high probability that key staff wouldn’t be taking leave if the area they were responsible for was having a an impact on the current exonomjc woes like the Sec of Transportation….they’d be replaced.
Erski Gumby
SB20 Nov 14, 2021 2:58PM ET
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But, but, but Trump! 😭😭😭
John Cerniuk
John Cerniuk Nov 14, 2021 2:58PM ET
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no its easier to just make up things with no facts to back up arguments or points of view.
 
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