Biden's inflation speech reflects concerns that the increasing prices will affect Democrats in 2022

July 21, 2021: -As consumer prices rise across vast swaths of the U.S. economy, Biden has a message for voters, If you’re concerned about inflation, you should support 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 an inflation speech on Monday at the White House.

Biden argues that the infrastructure and family support investments in his $4.5 trillion domestic spending plan would fund decades of economic growth, the workforce and keep prices less.

“If your primary concern right now is inflation, you should be more enthusiastic about this plan,” the president said.

Yet the fact that Biden addressed inflation at all is a sign of the rising concern among Democrats that increasing prices will be a potent political cudgel for Republicans to wield against them in next year’s midterm elections. 

In the last poll by Marist and PBS NewsHour, 26% of all adults reported that their most significant economic concern right now is inflation, more than unemployment.

Suppose inflation continues apace for the rest of the year. In that case, however, it will fuel the Republican claim that Biden’s domestic spending plan is reckless and that Democrats are trying to pump trillions more government dollars into an overheated economy.

This argument was on full display in the previous week on the Senate floor, the Minority Leader Mitch McConnell had accused Democrats of trying to spend their way out of inflation.

“Now, the Democrats’ big plan is to try and inflate their way out of inflation,” McConnell said on Thursday. “Inflate out of inflation, well that will be one wild ride for working Americans.”

However, Texas Republican Sen. John Cornyn railed against what he called Democrats’ “irresponsible spending bonanza.”

The GOP argument has some holes; firstly, the fact that any money appropriated by Congress this year for Biden’s domestic spending bills will not come into the economy until six months at least after the bills are signed, and will therefore do little to impact the current post-pandemic price hikes.

The second problem with the Republican case is that a significant portion of the current price increases is due to pandemic-related supply chain imbalances. Biden quoted a figure of 60%.

On Monday, “As demand returns, there’s going to be global supply chain challenges,” Biden said.

“My administration is doing everything we can to address it. But, again, these disruptions are temporary,” he added.