Sen. Rick Scott (R-Fla.) says “unbelievable” levels of inflation and debt are now his chief concern, with the Florida Republican’s remarks coming a day after a new poll shows that 69 percent of Americans disapprove of President Joe Biden’s handling of inflation.
“My biggest concern is this unbelievable inflation and this unbelievable debt. There is a day of reckoning for all of this debt,” Scott told CNBC’s “Squawk Box” in an interview on Dec. 13, when asked to comment on a recent Congressional Budget Office (CBO) analysis of Biden’s Build Back Better spending agenda.
The CBO projects that if a series of its provisions were extended long term, it would raise the federal deficit by $3 trillion through 2031.
The new CBO score, released Dec. 10, is based on the assumption that various policies contained in the Build Back Better Act would be made permanent, and not the current version of the bill. An earlier CBO estimate, based on the Build Back Better plan as written, projected a net increase in the deficit of $367 billion over the next 10 years, excluding any additional revenue generated by enhanced tax enforcement.
“Live within our means. That’s what we have to do today. Not in a month. We need to start right now live within our means. You have to do it, families have to do it, governments should be doing it,” Scott added.
House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) issued a statement on Dec. 10 calling the new CBO score “fake” and “based on mistruths,” arguing that the analysis was misguided as it assumed the spending provisions would be made permanent, while “Democrats have committed that any extensions of the Build Back Better Act in the future will be fully offset, therefore ensuring BBBA will not increase the deficit.”
Scott’s remarks came a day after a new ABC/Ipsos poll found that 57 percent of Americans disapprove of Biden’s handling of the economic recovery and 69 percent disapprove of how the president is handling inflation. The latter figure was higher among Republicans and independents, with 94 percent and 71 percent, respectively, disapproving of his handling of inflation.
Surging inflation, which in the year through November hit a 39-year high of 6.8 percent, has emerged as an unwanted side effect of the stimulus-fueled economic rebound, rising faster than wages and eroding the purchasing power of Americans.
A number of economists have warned that if inflation stays too high for too long, it could lead to future inflation expectations to become de-anchored and fuel the kind of upward wage-price spiral that bedeviled the economy in the 1970s.
While inflation hasn’t yet had a significant effect on consumer spending, a key driver of the U.S. economy, it has weighed heavily on consumer sentiment.
The most recent University of Michigan consumer sentiment survey saw confidence pick up slightly in early December from the prior month’s decade-low; the uptick was driven entirely by households with incomes in the lowest third, with the other tiers recording losses.
Richard Curtin, chief economist of the Michigan University Surveys of Consumers, said that an expectation of incomes rising 2.9 percent in the year ahead was what drove the rise in sentiment among the bottom third of earners.
“This suggests an emerging wage-price spiral that could propel inflation higher in the years ahead,” Curtin said in a statement.
Echoing that sentiment were analysts at Wells Fargo, who said in a recent economic forecast for 2022 that they expect inflation to cool somewhat next year, while warning there’s a risk that COVID-19 interruptions and supply-chain disruptions could trigger “self-sustaining” wage and rent gains and lead to persistent inflation.
While Federal Reserve officials continue to expect inflationary pressures to ease once supply-side bottlenecks abate, the central bank has adjusted its narrative on “transitory” inflation, with Fed Chair Jerome Powell telling lawmakers in recent Senate testimony that it was time to “retire” that term in describing the current dynamics of rising prices.