Unanimous Consent Request--S. Res. 185
Floor Speech
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Mr. SCOTT of Florida. Madam President, Americans are worried about inflation. New polling shows that 87 percent of Americans are concerned about the rising costs of household items, like diapers and gas and groceries. That is up from 77 percent just last month. They have good reason to feel that way. Right now, reports show that a third of American households making less than $50,000 in annual income are buying less because of increasing prices, and more than one-quarter of all households report that rising prices on goods are causing them to purchase less.
Just this month, the Bureau of Labor Statistics reported that, over the last 12 months, food prices have gone up, and gas prices have risen 23 percent. That means, since Biden was elected, gas prices have increased about 70 cents per gallon across the Nation. Year over year, consumer prices increased 2.6 percent in March. That is up from an annual 1.7 percent increase in February. This is all in addition to statements from some of America's largest corporations, like Procter & Gamble and Kimberly-Clark, which recently announced that they are increasing prices on a number of their products. That includes essential household goods, like toilet paper and diapers.
The evidence of inflation is right in front of us. Just look at these numbers that show the percentage change in average unit prices versus last year: groceries up 2.6 percent; household goods up 5.2 percent; baby care up 7 percent; general merchandise up 7.1 percent. Wages never go up this fast. So who does it hurt? It hurts the poorest and those on fixed incomes.
Businesses are also expecting price increases to continue.
According to data from FactSet, 47 S&P companies have mentioned inflation on their earnings calls for Q1 2021. That is more than during any other quarter in the last 10 years.
On its most recent earnings call, Procter & Gamble's chief financial officer, Andre Schulten, said:
The commodity cost challenges we face this year will, obviously, be larger next fiscal year.
Who gets hurt the most when inflation rises? Not the rich. It is working families, especially those on low and fixed incomes.
I grew up poor and watched my parents struggle to put food on the table. I know just how much a slight rise in prices can hurt a family, because I saw it while I was growing up, and that is what is happening right now across our Nation.
We know that those in the Biden administration are worried about this. They know that rising costs caused by their massive spending are bad for Americans, but they won't say it. While they are reportedly worrying in private about the effects of their spending plans, they have had a different message in public.
On April 13, the New York Times reported that officials and aides at the White House and the Department of the Treasury have been holding private meetings for months to discuss inflation and have conducted indepth internal analyses for senior officials and President Biden.
The article goes on to read:
Mr. Biden's aides are sufficiently worried about the risk of that spending fueling inflation that they shaped his infrastructure proposal, which has yet to be taken up by Congress, to funnel out $2.3 trillion over eight years, which is slower than traditional stimulus.
13, 2021]
The Biden Administration Is Quietly Obsessing Over Inflation (By Jim Tankersley)
Washington.--Even before President Biden took office, some of his closest aides were focused on a question that risked derailing his economic agenda: Would his plans for a $1.9 trillion economic rescue package and additional government spending overheat the economy and fuel runaway inflation?
To find the answer, a close circle of advisers now working at the White House and the Treasury Department projected the behaviors of shoppers, employers, stock traders and others if Mr. Biden's plans succeeded. Officials as senior as Janet L. Yellen, the Treasury secretary, pored over the analyses in video calls and in-person meetings, looking for any hint that Mr. Biden's plans could generate sustained price increases that could hamstring family budgets. It never appeared.
Those efforts convinced Mr. Biden's team that there is little risk of inflation spiraling out of the Federal Reserve's control--an outcome that Wall Street analysts, a few prominent Republicans and even liberal economists like Lawrence H. Summers, the former Treasury secretary, have said could flow from the trillions being pumped into the economy.
Traditional readings of price increases are beginning to turn upward as the recovery accelerates. On Tuesday, the Consumer Price Index rose 0.6 percent, its fastest monthly increase in more than a decade, while a less volatile index excluding food and energy rose a more muted 0.3 percent.
But Mr. Biden's advisers believe any price spike is likely to be temporary and not harmful, essentially a one-time event stemming from the unique nature of a pandemic recession that ruptured supply chains and continues to depress activity in key economic sectors like restaurant dining and tourism.
The administration's view mirrors the posture of top officials at the Fed, including its chairman, Jerome H. Powell, whose mandate includes maintaining price stability in the economy. Mr. Powell has said that the Fed expects any short-term price pops to be temporary, not sustained, and not the type of uptick that would prompt the central bank to raise interest rates rapidly--or anytime soon.
``What we see is relatively modest increases in inflation,'' Mr. Powell said in March. ``But those are not permanent things.''
Armed with their internal data and conclusions, administration officials have begun to push back on warnings that a stimulus-fueled surge in consumer spending could revive a 1970s-style escalation in wages and prices that could cripple the economy in the years to come.
Yet they remain wary of the inflation threat and have devised the next wave of Mr. Biden's spending plans, a $2.3 trillion infrastructure package, to dispense money gradually enough not to stoke further price increases right away. Administration officials also continue to check on real-time measures of prices across the economy, multiple times a day.
``We think the likeliest outlook over the next several months is for inflation to rise modestly,'' two officials at Mr. Biden's Council of Economic Advisers, Jared Bernstein and Ernie Tedeschi, wrote on Monda in a blog post outlining some of the administration's thinking. ``We will, however, carefully monitor both actual price changes and inflation expectations for any signs of unexpected price pressures that might arise as America leaves the pandemic behind and enters the next economic expansion.''
Some Republicans call that posture dangerous. Senator Rick Scott of Florida, the chairman of his party's campaign arm for the 2022 midterm elections, has called on Mr. Biden and Mr. Powell to present plans to fight inflation now.
``The president's refusal to address this critical issue has a direct negative effect on Floridians and families across our nation, and hurts low- and fixed-income Americans the most,'' Mr. Scott said in a news release last week. ``It's time for Biden to wake up from his liberal dream and realize that reckless spending has consequences, inflation is real and America's debt crisis is growing. Inflation is rising and Americans deserve answers from Biden now.''
Economic teams in recent administrations spent little time worrying about inflation, because inflationary pressures have been tame for decades. It has fallen short of the Fed's average target of 2 percent for 10 of the last 12 years, topping out at 2.5 percent in the midst of the longest economic expansion in history.
Shortly before the pandemic recession hit the United States in 2020, President Donald J. Trump's economic team wrote that ``price inflation remains low and stable'' even with unemployment below 4 percent. As the economy struggled to climb out from the 2008 financial crisis under President Barack Obama, White House aides feared that prices might fall, instead of rise.
``Given the economic crisis, we worried about preventing deflation rather than inflation,'' said Austan Goolsbee, a chairman of the Council of Economic Advisers during Mr. Obama's first term.
The conversation has changed given the large amounts of money that the federal government is channeling into the economy, first under Mr. Trump and now under Mr. Biden. Since the pandemic took hold, Congress has approved more than $5 trillion in spending, including direct checks to individuals.
Mr. Biden's aides are sufficiently worried about the risk of that spending fueling inflation that they shaped his infrastructure proposal, which has yet to be taken up by Congress, to funnel out $2.3 trillion over the course of eight years, which is slower than traditional stimulus.
Even before Mr. Summers and others raised economic concerns about Mr. Biden's $1.9 trillion relief bill, officials were wrestling with their own worries about its inflation risks. They had internally concluded, with direction from Mr. Biden, that the biggest risk to the economy was going ``too small'' on the aid package--not spending enough to help vulnerable Americans survive continued stints of joblessness or lost income. But they wanted to know the risks of going ``too big.''
They tested whether an uptick in inflation might cause people and financial markets to expect rapid price increases in the years to come, upending decades of what economists call ``well-anchored'' expectations for prices and potentially creating a situation where higher expectations led to higher inflation. They estimated the odds that the Fed would react to such moves by quickly and steeply raising interest rates, potentially slamming the brakes on growth and causing another recession.
The informal group that initially gathered to research those questions included Mr. Bernstein, a member of the Council of Economic Advisers; David Kamin, a deputy director of the National Economic Council; Michael Pyle, Vice President Kamala Harris's chief economic adviser; and two Treasury officials, Nellie Liang and Ben Harris. More members have joined over time, including Mr. Tedeschi.
The group reports regularly to Ms. Yellen and other senior officials including Brian Deese, who heads the N.E.C., and Cecilia Rouse, who leads the C.E.A. Its work has informed economic briefings of Mr. Biden and Ms. Harris.
``The president and the vice president, their job is to deliver good economic outcomes for the American people,'' Mr. Pyle said in an interview. ``Part of what delivering strong economic outcomes to the American people means is ensuring that their team is fully on top of both the tailwinds to the U.S. economy but also the risks that are out there. And this is one of them.''
Mr. Pyle and his colleagues looked at financial market measures of inflation expectations, including one called the five-year, five-year forward, which currently shows investors expecting lower inflation levels over the next several years than they expected in 2018.
At the same time, officials at the Treasury's Office of Economic Policy conducted a series of modeling exercises to ``stress test'' the virus relief package and how it might change those price and expectation measures if put in place. They considered scenarios where consumers quickly spent their aid money, which included $1,400 checks, or where they did not spend much of it at all right away. They talked with large banks about trends in customers' cash balances and how quickly people were returning to the work force. Ms. Yellen, a former Fed chair, helped adjust the models herself.
The exercises produced a wide range of possibilities for inflation. But they never suggested it would rise so rapidly that the Fed could not easily handle it by adjusting interest rates or other monetary policy tools. They saw no risk of a sharp return to recession--and no reason to pull back from spending proposals that administration officials believe will help the economy heal faster and help historically disadvantaged groups, like Black and Hispanic workers, regain jobs and income.
``We're going to see some heat in this economy,'' Mr. Pyle said. ``That heat is going to be good and redound to the benefit of wages and labor market conditions overall and particularly for a number of communities that have been at the margins of the labor market for too long.''
If the data proves that forecast wrong, officials say privately, they will be quick to adapt. But they will not say how. If inflation were to accelerate in a sustained and surprising way, some officials suggest, the administration would trust the Fed to step in to contain it.
There is no plan, as of yet, for Mr. Biden to consider inflation-fighting actions of his own.
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Mr. SCOTT of Florida. The content and conclusions of these meetings and working groups have not been disclosed or been made available to the public.
While privately worrying about the same issue I have been sounding the alarm on for months, the Biden administration continues to mislead the American public and ignore the threat of inflation.
Over the last 2 months, I have asked the National Economic Council about its plans to fight inflation and protect American families.
I have written a Federal Reserve member, asked him what can be done to help families who are seeing skyrocketing gas prices and increasing mortgage rates.
I have called on President Biden and Federal Reserve Chair Powell to lay out their clear plan to address inflation and rising prices that threaten American families. I have yet to get a straightforward or acceptable response. I have yet to hear them acknowledge this very real threat or propose a solution to protect families.
So today Senator Braun and I are making a simple request that the Biden administration share with the Senate all of its notes, memos, and reports regarding their discussions and plans to mitigate and prevent growing inflation.
Inflation is a very real threat to the well-being of already struggling families, and the last thing American families need is to be misled by this administration.
Right now, Democrats in Washington are living in a fantasyland where debt doesn't matter, spending has no consequences, inflation is impossible.
But the reality is that inflation does have consequences, and it is the duty of everyone here, especially the President of the United States, to be open and transparent with the American people about what is happening with inflation.
There is no reason the Biden administration should be hiding this information. Americans deserve to know the consequences of massive government spending, and they deserve leadership that will show some fiscal responsibility when it comes to their taxpayer dollars.
I look forward to all my colleagues supporting this effort to increase transparency.
Madam President, as if in legislative session, I ask unanimous consent that the Senate proceed to the consideration of S. Res. 185, submitted earlier today.
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Mr. SCOTT of Florida. Madam President, the decision by my colleague to block this resolution is clearly disappointing.
Let's remember what this was about. This was about transparency. They just blocked the Senate from requesting basic information that is going to help all Americans.
And just look at these numbers again. Just in the last 4 months, grocery prices are up 2.6 percent; household care is up 5.2 percent; baby care is up 7 percent; general merchandise up 7.1 percent. We are clearly seeing inflation.
Senate Democrats just objected to transparency. That means they are against getting the facts, against ensuring accountability, and against getting the American people the information they need to make smart decisions as prices keep rising.
Eighty-seven percent of Americans are worried about the rising costs of goods. Apparently, so is the White House. So don't the American people deserve the same information about what is happening with the economy?
Floridians deserve to know the truth about inflation and so do the people of Ohio. Why does my colleague want to keep them in the dark?
This administration is telling the American people one thing but saying something else behind closed doors. That is wrong.
The American people deserve the truth. Inflation is real. It is happening. It is hurting American families. It is time President Biden does something about it, and I am extremely disappointed my colleague is actually today helping the President mislead the American people.
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