WASHINGTON — White House officials are bracing for another grim report on inflation when the Labor Department releases its latest figures Friday, amid growing attacks from Republicans seeking to link President Joe Biden’s policies to rising prices ahead of the midterm elections.
The White House expects the Labor Department’s release of May’s consumer price index, a key measure of inflation, to be “elevated,” driven by high fuel prices, White House press secretary Karine Jean-Pierre said Wednesday. Economists also forecast the report will show prices continued to rise last month at their highest pace in decades, on par with April’s inflation of 8.3 percent.
White House officials have been increasingly looking to signal that inflation is a top priority for Biden, even as they acknowledge there is little Biden can do about it in the short term. Following the release of the latest numbers Friday, Biden will visit the Port of Los Angeles, giving him an opportunity to talk about the work his administration has done over the past year to ease bottlenecks at the port that put pressure on prices.
When Biden met with Federal Reserve Chairman Jerome Powell last week, he emphasized the importance of addressing inflation, a concern the Federal Reserve has been trying to tackle by gradually raising interest rates.
Biden called inflation “the bane of our existence” during an interview Wednesday with Jimmy Kimmel as he sought to make the case to a late night audience why Congress should pass legislation lowering the price of prescription drugs and child care to help ease pressure on consumers. That legislation has been stalled in Congress for the past year.
But Biden has warned that despite his efforts, high prices will be here to stay for a while.
“The idea we’re going to be able to click a switch, bring down the cost of gasoline is not likely in the near term, nor is it with regard to food,” the president told reporters last week.
Meanwhile, Republicans spent the week ramping up efforts to link Biden’s Covid stimulus bill, passed in the early months of his presidency, to rising inflation and accusing the administration of missing early warning signs.
It was a line of attack Republicans raised repeatedly during two days of testimony on the Hill by Treasury Secretary Janet Yellen.
“I think that there’s no question that the $2 trillion bill last year overheated the economy, and it’s why we have the mess that we have today,” Sen. John Thune, R-S.D., said to Yellen during a Senate hearing this week.
Republicans have been referencing a March report by the San Francisco Federal Reserve that found Biden’s stimulus efforts may have raised inflation by about 3 percentage points in 2021.
Yellen pushed back on the attacks, saying the $1.9 trillion Covid stimulus bill, called the American Rescue Plan Act, contributed at most “modestly” to inflation and was essential help to Americans struggling to pay their bills and feed their families as the country came out of the depth of the pandemic. She said the rapid pace of the recovery along with Russia’s invasion of Ukraine have been the driving factors.
“We’re seeing high inflation in almost all developed countries around the world and they have very different fiscal policies, so it can’t be the case that the bulk of the inflation that we’re experiencing reflects the impact of the ARP,” Yellen said.
While Yellen said the current rate of inflation was unacceptable, she also acknowledged there is little the White House can do to have a significant impact. One move under “active consideration” is easing tariffs on China put in place by the Trump administration, Yellen said Wednesday, while moderating expectations around the impact that move could have.
“It could help to bring down prices of things that people buy that are burdensome,” Yellen said, but she added, “I want to make clear: I honestly don’t think tariff policy is a panacea with respect to inflation.”
In the meantime, the White House has been looking for bright economic spots to emphasize, like record low unemployment — something Biden addressed in remarks Friday — and any signs that inflation is easing.
“We continue to believe that the economy can transition from what has been a historic recovery of the economy to stable steady growth and inflationary pressures moderating, which is what experts have been saying for some time now,” Jean-Pierre told reporters Wednesday on the upcoming inflation data. “We are already beginning to see this happen in a range of measures.”
