Transportation Secretary Pete Buttigieg on Sunday blamed high inflation on a “global phenomenon,” pushing back on the notion that Democrats’ spending bills are largely responsible for rising prices.
On CBS’s “Face the Nation,” moderator Margaret Brennan asked Buttigieg about Republicans criticizing Democrats for passing last year a $1.9 trillion stimulus package, dubbed the American Rescue Plan, that preceded a rise in inflation that hit a roughly 40-year high.
“If we hadn’t rescued the economy through the American Rescue Plan, we would not have had the 10 million jobs that were created under this president,” Buttigieg said.
“We wouldn’t be seeing some of the lowest unemployment numbers in the history of the republic. We would be faced with the kinds of problems that we were faced with when the president arrived, which was an economy that was facing a very real risk of freefall,” he continued, also calling the national unemployment rate of 3.5 percent “strong as hell.”
Estimates vary on the impact of the stimulus package on inflation, with economists generally agreeing that it served as a contributor to some degree along with the war in Ukraine, supply chain snarls and housing shortages.
An economist at the right-leaning American Enterprise Institute estimated in February that the bill added 3 percentage points to inflation in 2021, when it hit a nearly 40-year high of 7 percent. That estimate aligned with researchers at the Federal Reserve Bank of San Francisco.
Mark Zandi, chief economist at Moody’s Analytics, suggested in June that the rescue package’s impact on year-over-year inflation may have been as little as 0.1 percentage points.
“Part of the challenge we have is the productive capacity of our country racing to keep up, so failing to invest in that wouldn’t make the problem better. It would make it worse,” Buttigieg said on CBS.
“But, again, the numbers you just quoted to me would make clear that a majority of inflation is not attributable to fiscal policy. … The American people understand that inflation is a global phenomenon,” the Transportation secretary continued.
The latest consumer price index indicates prices rose 0.4 percent in September, the second straight month of accelerating inflation. The annual inflation rate dropped slightly to 8.2 percent but remains near levels not seen since the 1980s.
Buttigieg on Sunday went on to tout the Inflation Reduction Act’s provisions that will soon allow the government to negotiate some Medicare prescription drug prices.
“It’s a very clear choice, a very clear difference in approaches here right now on Capitol Hill and among officeholders, where the focus for Democrats, the focus for the president, is to cut that cost of living and to cut the pressure,” Buttigieg said. “Give people more breathing room at a time where inflation remains a major concern.”
Source: The Hill