Biden Seeks to Curb Energy Costs; Manchin Urges Inflation Action
(Bloomberg) -- President Joe Biden said he’s directed his top economic aides to focus on reducing energy costs, which he blamed for accelerating U.S. inflation after a report showed the biggest surge in consumer prices in a generation.
A key Democratic voter in the U.S. Senate, meantime, warned that the report dashes any hope that rising prices are “transitory,” as administration officials have repeatedly argued.
“Inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me,” Biden said in a statement after the consumer price index rose in October at the fastest annual pace since 1990.
“The largest share of the increase in prices in this report is due to rising energy costs,” Biden said, though he noted that natural gas prices have fallen since data for the October report were collected.
“I have directed my National Economic Council to pursue means to try to further reduce these costs, and have asked the Federal Trade Commission to strike back at any market manipulation or price gouging in this sector.”
While the White House has suggested that inflation would ease as the U.S. economy recovers from the pandemic, Wednesday’s report showed that prices have rapidly become a political problem too serious to gloss over. A key swing vote in the Senate, West Virginia Democrat Joe Manchin, said in a tweet that inflation is “getting worse.”
The consumer price index rose 6.2% in October from a year earlier, according to Labor Department data released Wednesday. The CPI also rose 0.9% from September, the largest gain in four months. Both advances exceeded all estimates in a Bloomberg survey of economists.
Americans face a U.S. holiday season with Covid-19 still raging and supply-chain chain logjams causing delivery delays and shortages for all manner of consumer goods. The CPI report showed prices increasing for nearly every sector -- energy, housing, food, used cars and trucks, medical care, new vehicles, household furnishings and recreation. The only categories of goods that saw prices fall were airline fares and alcohol.
Republicans have pounced on the rise in prices as evidence of what they consider Biden’s mishandling of the economy. One of former President Donald Trump’s economic advisers, Stephen Moore, said in a statement that “today’s dismal consumer price index figure combined with the soaring producer price index 8% number from earlier this week is evidence that President Biden’s policies are making life worse, not better for working class Americans.”
The president suggested in his statement that monetary policy makers also bear responsibility for addressing inflation. “I want to reemphasize my commitment to the independence of the federal reserve to monitor inflation, and take steps necessary to combat it,” the statement said.
Biden will travel to the Port of Baltimore later Wednesday to celebrate the $550 billion infrastructure plan Congress passed last week. He’s expected to promote the legislation as a cure for inflationary pressures, saying in his statement that it will “bring down these costs, reduce these bottlenecks, and make goods more available and less costly.”
However, the president now faces the challenge of getting his other major bill, a package of social measures and tax changes known as Build Back Better, through the Senate. The White House has argued that the two bills together will help to tame inflation; Biden has insisted that the $1.75 trillion cost of Build Back Better will be fully offset by provisions raising federal revenue, including tax increases.
Republicans will surely seek to exploit Manchin’s trepidation about the legislation. Build Back Better won’t pass without his vote, as all 50 Republican senators oppose it. Manchin has previously called for a “pause” to sort out the effects of the Biden economic measures on inflation.
In his statement, Moore said that “full-fledged Bidenonomics through his Build Back Better plan will only make inflation even worse by spending, borrowing trillions more dollars we don’t have.”
Biden cited employment growth in trying to paint a better picture of the economic outlook. “We have more work to do, but there is no question that the economy continues to recover and is in much better shape today than it was a year ago,” he said.
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