President Joe Biden’s five-point plan: Reducing the Deficit, Tax Reform, Clean Energy, Lowering Prescription Drug Costs, and Covid Relief Fraud Recovery.
“Americans don’t get how inflation works,” grumbled MSNBC opinion columnist Hayes Brown today. “That’s a problem for Biden.”
“8 in 10 Americans think the federal government needs to do more to fight inflation,” Hayes went on before launching into a very complicated explanation of why the White House has very little control over the sticker shock that is taking the country by storm. “I’m not sure they really want that.”
Americans might not understand the inner workings of the Federal Reserve, but they understand not being able to afford groceries or pay their bills. Taxpayers may not know exactly what they want, other than someone- anyone- to “fix this”- but they do know when they want it: Now.
Since the American people aren’t likely to master graduate-level Economics 701 before now and Election Day 2022, fair or not, much of the blame for higher prices has landed at the feet of President Joe Biden. The President has been facing constant pressure from the press recently on a variety of subjects from inflation to abortion and beyond.
Plenty of media personalities and journalists have long memories. They are neither unfamiliar with warnings about out-of-control government spending leading to historic inflation nor shy about broaching the subject.
“The Biden stimulus is admirably ambitious,” cautioned former Obama advisor Larry Summers for the Washington Post in February of 2021- an opinion piece making the rounds again in May of 2022. “But it brings some big risks, too.”
“As a massive program moves towards enactment and implementation, policymakers need to ensure that they have plans in place to address two possible, and quite serious, problems,” Summers advised.
“While there are enormous uncertainties, there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability,” Summers predicted presciently. “This will be manageable if the monetary and fiscal policy can be rapidly adjusted to address the problem. But given the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply.”
Summers was hardly alone at the time in doomsaying over inflation fears. Still, current White House economic advisor Cecilia Rouse made the point on CNN this morning that this inflation may be, “a consequence of having an effective strategy against the pandemic”.
Since last year, there have also been a couple of major, unforeseen events which have shaken the global marketplace, not least of which is Vladimir Putin’s invasion of Ukraine.
In his speech Tuesday, President Biden laid much of the blame for inflation and higher prices at the feet of Republicans, Donald Trump, coronavirus and Vladimir Putin.
To fight inflation, the Biden Administration plans to focus on the following:
Covid Relief Fraud Recovery
“The Justice Department has a chief prosecutor for pandemic fraud who is going to go after the criminals who stole billions — billions in relief money meant for small businesses and American families but never got to them — got in the pockets of criminals,” President Biden said during his speech, promising to recover those funds.
Reducing the Deficit
“The biggest decline on top of us having a $350 billion drop in the deficit last year, my first year as President,” Mr. Biden said in his speech. “For the first time since 2016, the Treasury Department is planning to pay down the national debt issued to the public this quarter. And for all the talk that Republicans make about deficits, it didn’t happen a single quarter under my predecessor. Not once.”
“And, looking ahead, I have a plan to reduce the deficit even more, which will help reduce inflationary pressures and lower everyone’s costs for families,” he promised.
Lowering Prescription Drug Costs
“Look, it’s a plan that lets Medicare negotiate the price of prescription drugs, as they do with the Department of Veterans Affairs,” President Biden explained. “We can cap the price of insulin at $35 instead of the hundreds of dollars or even $1,000 a month for some families.”
“And my plan provides tax credits to utility companies to generate clean energy and those companies are required to pass those savings on to families,” Mr. Biden said. “I met with about a dozen of those utility CEOs here in the White House, and they confirmed this plan will lower energy bills for families immediately.”
“My plan includes tax credits for consumers to purchase electric or fuel-cell vehicles, new or used, which will save the typical driver about $80 a month not having to pay for gas at the pump; tax credits for folks to buy solar panels and heat pumps and more efficient windows and doors for their homes — estimated savings: $500 per year on average,” Biden promised.
“And we can do these things by making sure that no one earning less than $400,000 a year will pay a single penny more in federal taxes,” President Biden said. “All we’re asking is that the very wealthiest Americans and largest corporations begin to pay their fair share — at least part of their fair share.”
“You’ve heard me say it before: I’m a capitalist. I believe you should be able to make as much as you legally can, but just pay your fair share. There’s no reason why a billionaire should be paying a lower tax rate than a teacher or a firefighter,” he said.
“This — it’s time to grow the economy but from the bottom up and the middle out,” Mr. Biden exhorted. “Because here’s the deal: When the poor have a ladder up and the middle class grows, the wealthy always do very well. They do very well. That’s what this is about. That’s what this is about: everybody doing better.”
Calling his strategy a, “plan rooted in American values of fairness and decency,” Biden promised, “wealthy folks and corporations will pay a little more,” and, “billionaires will have to pay a minimum tax”.
Will these measures be enough to ease inflationary pressures and lower runaway prices?
(contributing writer, Brooke Bell)