- President Joe Biden addressed voters who are worried about inflation on Monday, arguing that his domestic spending plans would help keep prices low over the next decade.
- The short speech reflected a growing concern among Democrats that rising prices could hurt them in next year's midterm elections.
- Economists believe the price hikes are only temporary. The question for politicians is, how temporary?
WASHINGTON – As consumer prices rise across wide swaths of the U.S. economy, President Joe Biden has a message for voters: If you're worried about inflation, you should support Biden's infrastructure and domestic spending plans.
"My 'Build Back Better' plan will be a force for achieving lower prices for Americans looking ahead," Biden said in a speech Monday at the White House.
Biden argued the infrastructure and family support investments contained in his $4.5 trillion domestic spending plan will fund decades of economic growth, increase the workforce and keep prices low.
"If your primary concern right now is inflation, you should be even more enthusiastic about this plan," said the president.
Yet the fact that Biden was addressing inflation at all is a sign of the growing concern among Democrats that rising prices will be a potent political cudgel for Republicans to wield against them in next year's midterm elections.
For now, Biden still enjoys high favorability ratings, and most voters approve of the programs he wants to fund with his two bills.
But vulnerable House and Senate Democrats have good reason to worry about the coming year.
Republicans already have an advantage in that historical trends favor the opposition party in the first midterm after a new president is elected.
On top of that, consumer prices rose 5.4 % in June versus a year ago, according to Labor Department figures, the highest increase since 2008.
In a recent poll by Marist and PBS NewsHour, 26% of all adults reported that their biggest economic concern right now is inflation, more than unemployment.
Meanwhile, the view of Biden's economic advisers is largely unchanged: They don't deny that prices are going up, but they insist the effect is transitory, and should disappear within a few months.
"We will have several more months of rapid inflation, so I'm not saying that this is a one-month phenomenon," Treasury Secretary Janet Yellen told CNBC in an interview that aired Thursday.
"But I think over the medium-term, we'll see inflation decline back toward normal levels," she added.
If inflation continues apace for the rest of the year, however, it will fuel the Republican case that Biden's domestic spending agenda is reckless, and that Democrats are trying to pump trillions more government dollars into an already overheated economy.
This argument was on full display last week on the Senate floor, where Minority Leader Mitch McConnell accused Democrats of trying to spend their way out of inflation.
"Now, the Democrats' big idea is to try and inflate their way out of inflation," McConnell said Thursday. "Inflate out of inflation, well that will be one wild ride for working Americans."
Meanwhile, Texas Republican Sen. John Cornyn railed against what he called Democrats' "irresponsible spending bonanza."
Iowa's Joni Ernst went a step further, setting up props that looked like the game show "The Price Is Right." The senator's message? "The price is up."
The GOP argument has some holes: First, the fact that any money appropriated by Congress this year for Biden's domestic spending bills will not actually flow into the economy until at least six months after the bills are signed, and will therefore do little to impact the current post-pandemic price hikes.
The other problem with the Republican case is that a significant portion of the current price increases are due to pandemic-related supply chain imbalances. Biden quoted a figure of 60%.
The most notable of these is the semiconductor chip shortage that has forced automobile plants across the country to sit idle this spring, cutting into the supply of available cars and driving up the price of existing ones.
Global supply chain disruptions have vexed the White House this spring. Biden aides have privately conceded that there is little the government can do to fix them.
"As demand returns, there's going to be global supply chain challenges," Biden said Monday.
The president acknowledged that the chip shortage poses a big challenge.
"My administration is doing everything we can to address it. But, again, these disruptions are temporary," he said.
With 477 days to go until the midterm elections, the big question on Democrats' minds is just how temporary they will be.