Biden Says Infrastructure Bill Will Ease Inflation Pressure
(Bloomberg) -- President Joe Biden said the $550 billion in fresh infrastructure spending he’ll sign into law Monday will help ease inflation that’s raising consumer alarm and weighing on his approval rating.
If implemented correctly, the measure that cleared Congress last week will “lower inflationary pressures on our economy,” Biden said Friday.
“If we do it right, we know what it will mean -- it will create millions of new jobs, grow the economy and we’ll win the world economic competition we’re engaged in in the second quarter of the 21st century, with China and many other countries around the world,” Biden said in a cabinet meeting at the White House.
Biden said he’ll announce his pick next week to oversee the infrastructure spending. The White House said the president will select someone from outside the administration. Biden said he wants the person to eliminate waste, fraud and abuse, as he did as vice president during the implementation of stimulus programs during the Obama administration.
Rising inflation has hindered the administration’s effort to use the infrastructure package to rebuild public confidence in Biden, whose approval ratings plummeted over a summer defined by Democratic infighting over his domestic agenda and the chaotic withdrawal from Afghanistan. Just 42% of Americans approve of the job Biden is doing according to the most recent RealClearPolitics polling average, while 52% disapprove.
The consumer price index increased 6.2% from October 2020, according to Labor Department data released Wednesday, exceeding even the highest estimates in a Bloomberg survey of economists.
The higher prices, led by increases in the costs for energy, housing, food, and vehicles, have outpaced post-pandemic wage growth, leaving the White House to look for ways to contain costs driven up by supply chain bottlenecks and worker shortages.
Biden didn’t specify on Friday how the infrastructure bill would bring down inflation. But the White House has argued that by easing supply bottlenecks and improving productivity, the infrastructure bill will help increase capacity to produce goods and services and thus ease inflation.
Inflation data has intensified questions about whether Democrats will be able to hold support for the additional $1.75 trillion social spending and tax reform package currently being negotiated on Capitol Hill. Moderate Democratic senators -- including Joe Manchin of West Virginia-- have expressed concern that the legislation could further contribute to inflation. The White House argues that by reducing childcare and health-care costs, the bill would actually help most Americans’ pocketbooks.
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