Inflation, largely driven by Democrats’ “reckless” spending, is hurting poor and middle-class Americans more than the rich, Republicans in Congress have said in a new report.
Republicans on the Joint Economic Committee, from both the Senate and the House, issued a report on Monday on how inflation is affecting the pandemic recovery and Americans families.
“Democrats’ reckless spending has driven inflation to a three-decade high, and it’s making life harder for poor and middle-class Americans,” Sen. Mike Lee (R-Utah), ranking member of the joint committee, said in a statement, according to CNBC. “Inflation is eating into the livelihoods of American families. It’s causing them to fall further behind. The reckless spending must stop.”
The Bureau of Labor Statistics reported on Nov. 10 that the headline Consumer Price Index (CPI), a measure of inflation from the perspective of end consumers of goods and services, surged by 6.2 percent over the year and 0.9 percent over the month of October—the largest year-on-year increase since November 1990 and the largest month-on-month increase since 2008.
Jackie Benson, senior economist for the joint committee and the report’s author, pointed out that inflation is disproportionately hurting low-income Americans.
Benson said low-income households spend a large portion of their income on food, housing, and transportation, all three of which have seen significant price increases.
“In October, over half of the 5.4 percent annual increase in the CPI was driven by food and shelter prices,” Benson said in the report. “Transportation inflation is important too, as the cost of gas and used autos have experienced some of the largest increases to date—increasing 42 percent and 24 percent respectively.”
Gas prices nearing $5.00 a gallon are displayed at Chevron and Shell stations in San Francisco, Calif., on July 12, 2021. (Justin Sullivan/Getty Images)
Benson said the spending patterns of American households are different.
High earners spend 12 percent of their incomes on housing, while low earners spend 57 percent. The high earners spend 4 percent of their incomes on food at home, while for the low earners, 23 percent. Meanwhile, spending on gas is 2 percent vs. 8 percent, the report reads.
Benson also said lower-income families tend to buy more foreign-made goods than higher-income Americans, such as goods sold by Amazon, Wal-Mart, and Dollar General. These goods are also experiencing rapid price increases due to elevated demand and supply chain issues, which in turn disproportionately hurt lower-income Americans.
Last week, President Joe Biden said his $1.2 trillion infrastructure bill would “reduce the cost of goods to consumers, and businesses, and get people back to work.”
“It’s about taking a long-term view of our economy to deliver lower costs, more jobs, and ensure our shelves are stocked with product,” Biden said.
On Sunday, several top Biden administration officials said that another White House-backed social spending package that will cost at least $1.75 trillion might solve soaring inflation in the United States.
U.S. House Speaker Nancy Pelosi (D-Calif.) speaks to reporters as House Democrats work on infrastructure and spending bills on Capitol Hill in Washington, D.C., on Nov. 4, 2021. (Joshua Roberts/Getty Images)
“Inflation is high right now, and it is affecting consumers in their pocketbook and also in their outlook for the economy. But those concerns underscore why it’s so important that we move forward on the Build Back Better legislation,” White House National Economic Council Director Brian Deese told CNN in an interview, echoing Biden’s rhetoric.
In similar remarks to CBS on the same day, Treasury Secretary Janet Yellen blamed the spread of COVID-19, the disease caused by the CCP (Chinese Communist Party) virus, and not the government’s response policies for America’s economic woes, adding that a social spending bill would aid recovery.
Tom Ozimek and Jack Phillips contributed to this report.
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