Biden, Conceding Inflation Peril, Says His Agenda’s Part of Cure
(Bloomberg) -- President Joe Biden acknowledged that Americans are feeling the pressures of inflation and goods shortages, promising that his soon-to-be-signed infrastructure legislation is part of his plan to overcome the extended effects of the coronavirus pandemic.
“Many people remain unsettled about the economy and we all know why,” he said Wednesday as he visited the Port of Baltimore to promote the infrastructure investments that would ease supply chain bottlenecks.
Consumers “see higher prices” and when “they go to the store or go online, they can’t always find what they want and when they want it,” Biden said. “Everything from a gallon of gas to a loaf of bread costs more,” he conceded, pointing to a report released earlier in the day showing a surge in consumer prices in October.
Though inflation is “real” and “one of the most pressing economic concerns of the American people,” there are also plenty of good signs in the economy, he said. “Jobs are up, wages are up, values are up and savings are up.”
The infrastructure bill, which Biden plans to sign into law on Monday at a bipartisan White House ceremony, is part of “a plan to finish the job of getting us back to normal from the pandemic and having a stronger economy than we ever had before,” he said.
The president’s visit was intended to demonstrate the benefits of the kind of investment the $550 billion in new infrastructure money will provide nationwide. With new cranes and a second 50-foot-depth berth on the way, Baltimore’s port markets itself to some of the world’s largest container vessels.
But the event ended up being overshadowed by the Wednesday morning report, which showed that prices are rising at the fastest pace in more than 30 years, with the consumer price index rising 6.2% in October from a year earlier, according to Labor Department data.
Biden advanced the argument that improvements in Baltimore and at other U.S. ports would help improve supply chain problems, which he said were only exacerbated by the pandemic. Overseas suppliers and shippers have at times been hobbled by the virus, while domestic demand has shifted as many people have spent fewer dollars on restaurants and services. “Covid-19 has changed the way we spend our time and our money,” he said.
At the same time, Biden continued, Americans now have more money to spend. “More products are being delivered than ever before. That’s because people have a little more breathing room than they did last year. And that’s a good thing.”
Maryland Governor Larry Hogan, a Republican who joined Biden at the port, said the infrastructure bill, passed by Congress late last week, “is going to be tremendous.”
The report, putting numbers behind the forces many Americans are feeling, raises the political challenges Biden faces after Democrats suffered defeats in off-year state elections last week. So, he spent much of his Wednesday speech explaining why prices have risen and some products are hard to find, and how his legislative plans will ameliorate those problems.
The inflation report prompted a warning from Senator Joe Manchin, a West Virginia Democrat whose vote Biden needs to pass his other major legislative package, a mix of social spending, climate measures and tax changes.
Manchin said in a tweet that inflation is not “transitory” -- as administration officials have said -- and added that “DC can no longer ignore the economic pain Americans feel every day.”
His reaction to the inflation report raised fresh concern about the second part of Biden’s economic agenda, legislation called “Build Back Better.” Manchin has previously questioned whether the measure, currently expected to spend about $1.75 trillion over 10 years, would add to inflation.
Biden said in Baltimore, as he has several times before, that the Build Back Better legislation would be “totally paid for” by federal revenue-raising measures including tax increases, and he pointed to a letter by prominent economists who predicted that his combined economic agenda would reduce inflation.
The Baltimore port is a success story at a time of bottlenecks, running comparatively smoothly as infrastructure investments take hold -- including new cranes, dredging an extra berth to accommodate large ships, and a forthcoming expansion of a crucial rail link.
“We’re going to reduce congestion,” Biden said. “We’re going to address repair and maintenance backlogs, deploy state of the art technologies and make our ports cleaner and more efficient.”
Tonnage at the port has been steady, far from the delays in Asia and the crush of demand at the ports of Long Beach and Los Angeles. Baltimore is the top port of arrival for U.S. auto imports, which have been hampered by a semiconductor shortage.
Senator Chris Van Hollen, a Maryland Democrat, said money from the infrastructure bill would help build a third 50-foot berth. “The bottom line is there’s lots more work to do and a lot more Marylanders to hire with good-paying jobs,” he said.
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