The top Republican on the House Ways and Means Committee has warned that Democrat President Joe Biden’s efforts to tame soaring inflation are nothing more than a “political gimmick” and “theater.”
Rep. Kevin Brady (R-TX), the Republican Leader on the House Committee on Ways and Means, argues that Biden’s proposals—like rolling back some Trump-era tariffs on Chinese goods or a gas tax holiday—will do nothing to tackle inflation.
Brady made the remarks in an interview on CNBC’s Squawk Box on Tuesday.
During the appearence, Brady said Biden’s policies have contributed to soaring inflation in a “big way.”
Inflation has been running at a 40-year high in the United States, with the most recent Consumer Price Index (CPI) data showing prices rising at 8.6 percent in annual terms.
Alternate measures of inflation, however, put this figure much higher.
Economist John Williams, who calculates a version of the CPI using the same way the government used before 1980, puts the latest figure at 16.8 percent, a 75-year high.
“Our inflation overall is running about three points higher in America than it is in Europe and much of the rest of the world–that’s driven by Joe Biden’s policies in a big way,” Brady said in the interview.
Brady argued that the Biden administration has no effective plan to cool prices.
“The Biden Administration is trying to play a political game here that just isn’t working to tamp down this raging inflation,” he said.
A big factor squeezing American households’ budgets is the soaring price of gasoline, which is also a major contributor to the overall pace of inflation.
The price of gasoline is around double what it was when Biden took office, with the president variously blaming oil industry greed, a lack of refining capacity, global supply shortfalls set against a sharp post-pandemic rebound in demand, and the war in Ukraine.
Ramping up his rhetoric against gas station owners, Biden recently said on Twitter that he has a “message” for them: “This is a time of war and global peril.
“Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.”
Biden’s message prompted a critical reaction from Amazon founder Jeff Bezos, who called it “either straight ahead misdirection or a deep misunderstanding of basic market dynamics,” while the U.S. Oil and Gas Association roasted the president by saying that the author of the Twitter post should go back to school to learn basic economic fundamentals.
Brady, too, heaped criticism on Biden over the message, telling CNBC that, “at the same time the President is tweeting out to gas stations: ‘lower your prices,’ he is pushing for higher taxes that will drive fuel prices higher.”
The Texas Republican said that a “slimmed-down” version of Build Back Better that Senate Democrats are now considering would hit energy companies with another $145 billion in taxes.
“None of this makes sense, especially in a world where we have a number of countries lowering their taxes to try to tamp down inflation,” he said.
Brady added that the slimmed-down version of Build Back Better has “a trillion dollars of taxes” overall, which he argued would push inflation in the United States even higher and “rob money that businesses need to fix this supply chain crisis.”
“Who raises taxes heading into a recession?” he added.
Fears that soaring inflation and the Fed’s efforts to quell price pressures by hiking rates could tip the U.S. economy into a recession have mounted of late.
Meanwhile, the Atlanta Fed’s GDP “nowcast,” which provides a real-time estimate of economic output, projects that the U.S. economy contracted 2.1 percent in the second quarter.
If that estimate holds when official government data is released in the coming months, it would make it the second successive quarter of negative GDP growth which, according to many economists, amounts to a technical recession.
Brady said that Biden’s tapping of the strategic petroleum reserve did “nothing” to lower prices at the pump, while the president’s proposal for a three-month gas tax holiday would provide negligible relief to American families.
The Biden administration is also weighing rolling back some Trump-era tariffs on some Chinese imports in a bid to ease inflation, the White House said on Tuesday.
Brady called the Chinese tariff cut idea “another political gimmick that doesn’t really have any impact on consumer goods.”
While the Texas Republican said he doesn’t like tariffs as they “drive prices up, they distort the economy in a major way,” he argued that Biden “really isn’t tackling this the right way.
“I just think it is another act of theater.”
Brady said the keys to taming inflation are cutting government spending, introducing policies that encourage people to take jobs, permanently lowering taxes, and incentivizing U.S. energy producers to pump more oil.
“There’s four concrete areas right off the bat,” he said.
“And then there’s the regulatory burden: I would argue every business is paying more under this president because of regulation that ends up in higher prices, too.”