Never-Ending Flood of Problems Coming Out of President Biden's White House
Floor Speech
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Mr. GROTHMAN. Madam Speaker, every weekend we go home, and I am about to go back to Wisconsin for a couple more weeks. When we get back home, of course, we always talk to our constituents. I would like to address my speech tonight to the issue that is most on their mind.
Now, when we go back to Wisconsin in June we spend a lot of time on what they call breakfast on the farm because June is Dairy Promotion Month in Wisconsin, and with Dairy Promotion Month there are breakfasts on the farm where you have an opportunity to see so many of your constituents.
When back home, I go through the number one and number two issues. The number one issue is gasoline inflation. Everybody talks about it. They talk about how it is squeezing their budget and about how they are not able to go on trips as much as they used to. They have got to cut back on the type of food that they buy. So number one would be gas inflation.
I suppose number two would be food inflation because they talk about having to buy cuts of meat that aren't as good or other food products that aren't as good as they were before.
I think probably number three is housing inflation. When you look for a new house now, Madam Speaker, it costs so much more than it did a year ago.
I personally believe there are other issues that are as significant and perhaps in the long term more significant for America:
Are we going to wrap up Ukraine?
What are we going to do at our border?
What are we going to do about the over 110,000 people dying of drug overdoses every year?
But, obviously, in my district the number one issue is inflation, and I want to talk about how we got there.
How did we get there?
Any middle school C student should know that inflation is caused by excessive government spending which has to be covered by the Federal Reserve.
What are President Biden's signature accomplishments?
First of all, a $1.9 trillion bill called the American Rescue Plan came right out of the chute. His second biggest accomplishment was a $1.2 trillion infrastructure bill. These bills were in addition to a regular appropriation bill with excessive spending.
What would happen was as predictable as night following day. Multiple Republicans, including myself, warned last January and February against out-of-control inflation. Larry Summers, Barack Obama's director of the National Economic Council, called this bill the worst economic policy in the last 20 years. But whatever Larry Summers said was ignored as, sadly, the majority party charged again, spending $1.9 trillion that America did not have.
So now we are told we have the worst inflation in 40 years at 8.3 percent. Don't believe that 8.3 number. It is much worse than that. It always bothers me when people say that we have such a problem at 8.3 percent inflation. It is just so much more. Changes to inflation calculation over the years have grossly underestimated the real number.
I am going to lead off with housing. When I look at housing, I talk to builders, I talk to landlords, and I talk to real estate brokers. Housing is listed at a 5.5 percent increase in the last year. Ask any of these people if rents or new construction have gone up only 5.5 percent in the last year, and they will laugh at you.
Madam Speaker, 5.5 percent is what the government is telling people it is at. When I talk to builders, they tell me that a new house this year could cost 30 percent more than what that same house was going last year, and rents are clearly well over the 5.5 percent figure as well.
But government, for whatever reason, does not use the cost of new construction. They use what they refer to as the rental value of your new house, which is a much lower number.
I have a graph here showing the difference between the actual rent and the CPI rent, and you can see here, Madam Speaker, that there is about a 15 percent gap and that the actual rent has gone up about 15 percent more than the so-called CPI number which has gone up as well. So that is one of the reasons why I think Americans feel that they are in worse shape than only an 8.6 inflation. That is true.
I also want to point out that these numbers are only updated once every 6 months. That is one of the problems.
Although another problem we have is when they talk about the cost of housing, which usually would mean buying a house. They do not take into account the cost of interest on a mortgage, for whatever reason. In the last year, interest rates have gone up again probably because of the inflation, the interest cost on a 30-year fixed mortgage has gone up 39 percent--a 39 percent increase in interest payments on the house, assuming the cost of the house hasn't gone up at all.
But is that in the equation?
No. When we calculate inflation we do not take into account the massively higher interest rates that you have to pay now compared to the past.
By the way, as we look at things like housing, I beg the press corps to do a little bit of research. Don't just report this 8.3 percent number. You have the ability to talk to the brokers, to talk to the grocers, and to talk to the car dealers and find out what an appropriate number is. Back in the good old days when reporters were a little bit harder working, they would have done their own research and found out what the real inflation rate is.
Now, the next thing I am going to look at is used cars. On the official numbers they claim that used cars or the cost of having a used car has gone up about 16 percent. I have talked to a variety of car dealers from various different places in my diverse district. Everybody laughs at the idea that used cars have only gone up 16.1 percent. They all insist 30 percent on minimum. So here is another number that is thrown out to calculate that 8.6 number the government claims, and they are just way off on the cost of a new car.
If you buy a new car, Madam Speaker, of course, interest rates are going up as well which further increases things.
In any event, the point I am trying to make is that the amount of inflation is well over that 8.6 percent. It is certainly double digits over that when you talk about housing and double digits over that when you talk about used cars.
Subjectively talking to people who do the grocery shopping for the family, they believe that when they go through the checkout their costs are up way more than a few percentage points and the 10 percentage points that the Federal Government claims food at home has gone up the last year.
I beg the American people to demand action on inflation. I am trying to educate the American people that that action will inevitably have to mean undoing the out-of-control spending that took place around here in January or February. As we do it, we are going to have to reduce the amount of government. But I don't think we can go on with these housing prices and these car prices for the rest of our lives.
Madam Speaker, we want to get back to the days in which a young couple had a chance of affording a house. We want to go back to the days when you can eat like Americans are used to eating, not where you have to deal with inferior foods just because you can't afford it anymore. We want to go back to the days in which you can buy the type of car that you would like to buy.
So I encourage my colleagues this year, if possible, but if not then next year--maybe we are going to have to wait 3 years for some of this--we have got to get the spending back down where it was when you could live life in America like Americans are used to.
I beg the other side, when it comes to passing the new budget and preparing for the appropriation bills that are going to pass for the calendar year beginning October 1, let's stop spending so much money.
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Mr. GROTHMAN. Now buy that cheese. Remember that June is Dairy Month.
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