Every month since President Biden has been in office, inflation continues to rise. The latest Consumer Price Index report for March showed that inflation is at a 40-year high, and prices have risen by 8.5% during the last year. Remember, the Federal Reserve typically strives to keep inflation around 2%, which means further action from our central bank in increasing interest rates is likely to come.
However, there’s no clear indication when rising inflation rates will even plateau, let alone return to normal levels.
You see, inflation disproportionately hurts lower-income Americans, who may have fewer means to absorb these price increases — like a regressive tax, of sorts. In fact, according to the Penn Wharton Budget Model, Mr. Biden’s inflation tax will cost the average family at least an additional $5,000 per year. Even worse, wage growth has not kept pace with inflation. Although nominal wage growth reached 5.7% year-over-year last month, inflation-adjusted wages actually represent a decline of 2.7%.
With meat prices up nearly 15% from a year ago and gas prices still above $4-per-gallon across the nation, most American families are having to cut spending, save less, take on debt or a combination of all three. The impact this could have on the development of children, domestic violence or retirement for future generations cannot be understated.
One argument Democrats like to bring up as a reason for rising prices is Russian President Vladimir Putin’s invasion of Ukraine. But referring to increasing costs as “Putin’s price hike” is misleading as inflation under the Biden administration began long before Mr. Putin invaded. In fact, almost in lockstep with Mr. Biden’s inauguration, inflation began its historic run. Surging prices are primarily the result of Washington’s reckless, out-of-control government spending. Congress approved nearly $5.9 trillion in total spending in the last two years, including excessive government stimulus programs provided under the guise of pandemic relief and a $550 billion infrastructure package that was essentially a Trojan Horse for the Democrats’ Green New Deal.
Despite worsening inflation, Democrats still cannot kick their addiction to deficit spending. For example, on April 6, 2022, Mr. Biden extended a regressive and costly student debt pause. The following day, House Democrats voted to send another $55 billion to restaurants and businesses without any real offsets or so much as a score from the nonpartisan Congressional Budget Office. Furthermore, Mr. Biden’s Fiscal Year 2023 Budget Proposal includes more socialist spending measures and numerous tax hikes that hit the middle-class and small family businesses, which would exacerbate the effects of inflation on hard-working Americans.
It is a catastrophically bad policy for a government that is already $30 trillion in debt to borrow more and dump that money into an economy experiencing this kind of inflation. We must end all COVID-19-era spending programs, and any new spending should be fully offset to not increase deficits or worsen inflation. Additionally, Mr. Biden should avoid tax hikes that drive up prices further and discourage investment in the United States. If there were ever a time for fiscal sanity in Washington, it is right now.
• Ralph Warren Norman Jr. is an American real estate developer and politician serving as the U.S. representative for South Carolina’s 5th Congressional District since 2017.