President Biden’s economic team argued Sunday that the best remedy for inflation is to pass the administration’s multitrillion-dollar social welfare and climate change bill.
Treasury Secretary Janet Yellen told CBS’ “Face the Nation” that inflation will be a problem as long as the coronavirus continues to wrack the national economy.
“Many people remain concerned about the health consequences of working,” Ms. Yellen said. “Child care arrangements may be disrupted … if we’re successful with the pandemic to be sometime in the second half of next year, I would expect prices to go back to normal.”
The Treasury secretary argued that Mr. Biden’s multitrillion-dollar budget bill would help boost the social safety net and make it easier for people to return to work. Higher labor force participation up, especially among women, would help lower inflation, according to Ms. Yellen.
“There’s money in this package also to improve home health care for elderly citizens who have health issues,” she said. “And for those who are disabled. And again, that’s support that will make it easier for people to — to work and care for family members at the same time.”
Earlier this week, the Labor Department released data showing that inflation has reached a 30-year high. The data shows that the price of common goods and services, like groceries and gasoline, has skyrocketed by more than double digits over the past year.
The fallout has left White House officials scrambling to respond after having downplayed inflation since Mr. Biden took office. Part of their strategy is to repackage the administration’s social welfare bill as a cure for inflation.
Vice President Kamala Harris said last week while in Paris that tackling inflation was “probably” the administration’s top priority. She claimed that goal was complemented by the trillion-dollar spending bill, which “won’t cost anything” or make the problem of inflation worse.
Brian Deese, chairman of the White House’s national economic council, echoed the argument during an appearance on CNN’s “State of the Union.”
“Inflation is high right now, and it is affecting consumers in their pocketbook and also in their outlook for the economy,” said Mr. Deese. “But those concerns underscore why it’s so important that we move forward on the Build Back Better legislation.”
White House officials are eager to portray the package’s more controversial provisions, including Medicare drug pricing and tax hikes, as a cure for inflation.
“This, more than anything, will go at the cost that Americans face,” Mr. Deese said. “This will lower prescription drug prices … cut the cost of childcare by more than half for most working families.”
The left-leaning Tax Policy Center said in a new analysis that the tax increases proposed by House Democrats would hit about 30% of lower- and middle-class households starting in 2022 if the bill becomes law.
• Dave Boyer contributed to this story.