- The Washington Times - Wednesday, July 13, 2022

Republicans are labeling President Biden as “the pay-cut president” after a report Wednesday showed that inflation soared at an annual rate of 9.1% in June and workers’ wages fell further behind at a record pace.

The Consumer Price Index jumped 1.3% last month, the Labor Department said, bringing year-over-year inflation to its highest level in 41 years.

The report also showed that real wages fell 3.6% from a year ago. It was the 15th straight month of real wages declining under Mr. Biden, and even Democrats are sounding an alarm.

“The decline in real average hourly earnings at this point is terrible, the fastest pace of decline in 40 years,” tweeted Obama White House economist Jason Furman.

Excluding food and energy costs, core prices rose 0.7% from May to June, the biggest increase in a year. Energy costs contributed to nearly half of the overall increase in inflation.

The data increased the likelihood that the Federal Reserve will decide on another big interest rate increase at its meeting in two weeks, with higher borrowing costs ahead.

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Analysts said the persistent high inflation is raising expectations that the central bank will raise its benchmark rate by 100 basis points, or a full 1%, with another big rate hike likely in September.

The alarming report of out-of-control inflation for consumers and the economy also worsened the political prospects for Mr. Biden and congressional Democrats in the midterm election year. A poll Monday showed that the president’s approval rating dropped to 33%, and two-thirds of Democrats don’t want him to run again in 2024.

Republicans said Mr. Biden was wrong last year when he called high inflation “transitory” and that Democrats’ proposals for more spending would only worsen the problem.

House Minority Leader Kevin McCarthy, California Republican, said Democrats’ “reckless spending spree has caused consumer costs to increase at a record-breaking, four-decade-high inflation rate.”

“Alarmingly, despite insistence from the administration that the pain would be temporary, the trend is now accelerating with prices rising at ever-faster rates and infecting a broader and broader set of the products our families need,” Mr. McCarthy said in a statement to The Washington Times.

“Democrats have no plan to bring rising costs under control, and instead are doubling down on pushing trillion dollar tax-and-spend plans that will only make things worse. This backwards plan is crushing families, and a House Republican majority would halt it in its tracks,” he said.

SEE ALSO: Senate Dems’ negotiations on party-line spending bill complicated by record-high inflation number

Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said real wages have dropped nearly 4.8% since Mr. Biden was inaugurated.

“One year ago this week, President Biden’s reckless stimulus checks began flooding the economy, and we are seeing the result: Inflation is raging and getting worse, forcing massive pay cuts for American families,” Mr. Brady said.

He criticized the president and congressional Democrats for considering a scaled-down “Build Back Better” package that could include about $1 trillion in tax increases.

“Raising taxes on local businesses and farmers as our country faces a recession is crazy and will drive prices even higher,” Mr. Brady said.

The Committee for a Responsible Federal Budget, a nonpartisan fiscal watchdog group, called the inflation numbers “eyepopping.”

Committee President Maya MacGuineas said Congress should pass a deficit reduction measure that doesn’t include a House-passed proposal from Democrats to raise state and local tax deduction limits in certain high-income, left-leaning states such as New York, New Jersey and California.

“It’s become increasingly clear that the Federal Reserve is going to need help bringing inflation under control without causing a recession,” she said.

Bank of America analysts on Wednesday predicted a recession this year through the fourth quarter, with growth returning early next year.

Duke University economist Connel Fullenkamp said one of the few bright spots is that “the inflation rate should fall a bit going forward, since we’ve seen both oil prices as well as the prices of other commodities fall significantly lately.”

“People are already seeing some real relief at the gas pump after the Fourth of July holiday. Also, the very strong dollar is reducing the costs of imported products, which is also good news,” he said.

The inflation data for June didn’t reflect a decline in gas prices from an average record high of about $5 per gallon two weeks ago to $4.63 on Wednesday.

Mr. Biden said the worsening inflation numbers are misleading because prices for gas and commodities have come down from their peak.

“While today’s headline inflation reading is unacceptably high, it is also out-of-date,” Mr. Biden said in a statement. “Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June. Those savings are providing important breathing room for American families.”

He said core inflation declined for the third straight month.

Mr. Biden again blamed oil companies. He said the price of oil “is down about 20% since mid-June but the price of gas has so far only fallen half as much.”

“Oil and gas companies must not use this moment as an excuse for profiting by not passing along savings at the pump,” the president said.

Republicans and some economists blame Mr. Biden and congressional Democrats for contributing to high inflation with a multitrillion-dollar spending binge last year and earlier this year.

“Unbelievably, instead of working to bring relief to Americans by getting back into the domestic energy business and by pursuing pro-growth economic policies, the Biden administration is desperately trying to resurrect their deleterious tax-and-spending spree that had already been pronounced dead,” said Sen. Bill Hagerty, Tennessee Republican and a member of the Banking Committee.

“While the White House and Democrats are sure to promise this bill will reduce inflation, the obvious truth is that their reckless spending is what catapulted us off the cliff into this abyss of inflation in the first place. For the sake of the people and the country they serve, this administration needs to put an end to their partisan blame game and stop throwing fuel on the inflationary fire,” he said.

Republican National Committee Chairwoman Ronna McDaniel called on voters to hold Democrats accountable in November.

“This is insanity. There is no end in sight for families struggling with their wages and livelihoods being wiped out by Bidenflation,” she said. “Everyone feels the cost of Biden and Democrats’ reckless spending as Americans strain to afford gas and groceries. Voters know the best way to combat inflation is to vote out Democrats in November who rubber-stamped Biden’s failed agenda.”

Mr. Biden landed Wednesday in Israel for the start of a diplomatic trip to the Middle East. He said Congress should approve his proposals this month to lower the costs of prescription drugs.

To help lower gas prices, Mr. Biden said, he will “continue my historic release of oil from our Strategic Petroleum Reserve.”

“I will continue working with our European allies to put a price cap on Russian oil — sapping [President Vladimir] Putin of oil revenue,” Mr. Biden said. “And I will continue to work with the U.S. oil and gas industry to increase production responsibly.”

Republicans and some Democrats accuse Mr. Biden of discouraging U.S. energy production in favor of initiatives to promote his climate agenda.

Business leaders said Mr. Biden and Congress need to do more to bring inflation under control.

“Why hasn’t the administration cut tariffs?” tweeted Neil Bradley, executive vice president of the U.S. Chamber of Commerce. “Why are they restricting future domestic oil & gas production? Why isn’t Congress working to expand legal immigration? Why is Congress breathing life into a bill to raise taxes on domestic investment?”

• Dave Boyer can be reached at dboyer@washingtontimes.com.

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