No. 2 House Democrat: 'This is worldwide inflation' not caused by $2 trillion Biden stimulus
Inflation is now at 8.6%, but it was at 1.7% just before Biden signed his stimulus package into law, the second largest in U.S. history.
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House Majority Leader Steny Hoyer rejects the argument that President Joe Biden's $1.9 trillion economic stimulus bill, which he signed in March 2021, has fueled inflation to the highest level in 40 years.
Prices rose 1.7% during the 12-month period ending in February 2021 just before the bill was signed into law. Inflation is now at 8.6%, according to the latest government statistics
The American Rescue Plan included an extension of the federal unemployment bonus paid on top of weekly benefits as well as taxpayer-funded Obamacare subsidies. Democratic leaders are pushing to make those subsidies permanent. Hoyer was asked if he thinks such a move would make the inflation situation worse.
"I don't think it has anything to do with the American Rescue Plan," Hoyer said during a conference call with the organization Protect Our Care. "Inflation itself, after all, while we have high inflation, which is unfortunate, and very tough on our people, and one reason why we ought to keep healthcare costs down.
"When you look at the OECD nations, the industrialized nations of the world, America is about in the middle of the pack on inflation, which means this is a worldwide inflationary impact caused by the pandemic, caused by the war and the uncertainty that war has caused, particularly with respect to energy costs. So I don't believe that extending the affordability of the Affordable Care Act is going to impact inflation."
Federal Reserve Chairman Jerome Powell recently said the Russian invasion of Ukraine is not the main driver of inflation.
"Inflation was high ... certainly before the war in Ukraine broke out," Powell said.
Before the American Rescue Plan, Congress had already passed two pandemic-related stimulus bills, totaling about $3 trillion. Hoyer was asked if he agrees with economists who argue that Biden's stimulus bill supercharged inflation by adding too many dollars into the economy during the pandemic against the backdrop of a supply chain crisis.
"I don't believe that the American Rescue Plan, which in effect, saved us from going into a recession and responded to the ongoing consequences of the pandemic, which had shut down businesses, shut down supplies and shut down consumption so that suppliers did not produce more products," Hoyer said.
The Maryland Democrat said that as the pandemic eased, more people were spending the money they saved and suppliers had difficulty keeping up with demand, which drove up prices.
"Goods and services had been tamped down because of the pandemic," he said. "There was more demand than there was supply, and unfortunately, prices went up."
Hoyer also cited the war in Ukraine as a contributor to the spike in energy prices.
"This is worldwide inflation, not caused by the American Rescue Plan," he said.
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