Freshman Rep. Nancy Mace (R-N.C.) said Monday that although President Joe Biden and the Democrats have said they will not raise taxes on low- and middle-income earners, out-of-control spending by the federal government is causing inflation and is a form of taxation.
“Inflation is taxation. And you saw the Feds last year. They printed $4 trillion, or they’re on par to print another $4 trillion,” Mace said during a Monday interview with Fox News.
The Biden administration passed a $1.9 trillion COVID-19 relief bill after taking office and has unveiled a $6 trillion budget for 2022, which Republicans say is out of control and fiscally irresponsible. Included in the Democrats’ budget is a nearly $2 trillion infrastructure package that covers a list of non-infrastructure items like health care and child care.
“Washington wants to do the infrastructure, and any spending, through budget reconciliation, which is one-sided. When we did the COVID relief package, that $1.9 trillion, not a single Republican amendment passed. And then the infrastructure package alone, we’re talking art, we’re talking sculptures, we’re talking landscaping—things that absolutely have nothing to do with filling a pothole in this country,” Mace continued.
Federal Reserve Chairman Jerome Powell acknowledged that Federal Open Market Committee (FOMC) participants were surprised by some of the rising costs but said the effects should be temporary.
“Inflation has increased notably in recent months,” Powell said at a press conference that capped the FOMC meeting (pdf), adding that the Fed’s preferred inflation gauge, the personal consumption expenditures index, “will likely remain elevated in coming months before moderating.”
Some Fed officials are not fully convinced that inflation is temporary. St. Louis Fed President James Bullard said Monday that the economy is in unprecedented territory, making it hard to know where inflation will go next. But he added that “we have to be ready for the idea that there are upside risks to inflation, [it] could go higher” than the 2.5 percent rate he has forecast for next year.
Yet other officials echoed Powell’s views. Also on Monday, New York Federal Reserve Bank President John Williams, who also serves as vice-chair of the Fed’s policymaking committee, said that currently, high inflation is likely transitory.
“I expect that as price reversals and short-run imbalances from the economy reopening play out, inflation will come down from around 3 percent this year to close to 2 percent next year and in 2023,” Williams said.
Mace said rising prices are being felt by her and those in her community.
“When I go to the grocery store today, I’m shopping on the exterior aisle—meat, fruit, and vegetables—because the cost of groceries has gone up 21 percent. The cost of lumber to build a house, up 381 percent, which means to build a house today, over last year, is 30 percent more expensive today than it was a year ago. And after Colonial Pipeline, we all saw gas prices go up. My gas prices have stayed up. They haven’t gone back down,” said Mace.
Meanwhile, Republicans say with certainty that Biden’s spending spree is the cause of the inflation recently being felt. Rep. Jim Jordan (R-Ohio) compared gas prices from June 2020 to June 2021, blaming the increase as the result of Biden’s spending, to which the White House quickly responded.
White House press secretary Jen Psaki took to her Twitter page Monday to issue a rebuttal: “You forget to mention that gas prices are the same now as they were in June 2018 … @POTUS agrees families shouldn’t pay more at the pump—that’s why he’s opposed to GOP proposals to raise the gas tax.”
Mace said businesses are also feeling the crunch and are having to raise their prices to stay afloat.
“They’ve seen some people can afford it, and that’s the only way they keep their doors open is by raising prices, and it’s going to be astronomical in the future. It’s untenable for the long term for the American people,” said Mace.
Tom Ozimek and The Associated Press contributed to this report.