Inflation
Floor Speech
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Mr. THUNE. Mr. President, the AP headline from last Thursday said it all: ``U.S. inflation highest in 40 years, with no letup in sight''-- with no letup in sight. That is life in the Democrats' America. In January, U.S. inflation hit 7\1/2\ percent--the highest inflation since February of 1982. Inflation has now been above 5 percent for the last 8 months.
There are people raising families today who have never experienced this kind of inflation in their entire lifetimes. American families are hurting--hurting badly. The average American household spent an estimated $3,500 more last year as a result of inflation--$3,500. That is a lot of money for an ordinary family--a lot. Everywhere they turn, families are facing higher prices. Whether it is ground beef for the chili, bunk beds for the kids' room, or a new car to accommodate a new addition to the family, higher prices are the order of the day.
The price of chicken is up 10 percent. Pork is up 14 percent. Beef roasts are up 19 percent. Eggs are up 13 percent. Citrus fruits are up 10 percent. Whole milk is up 8 percent. The list goes on. Furniture and bedding were up 17 percent. Major appliances are up almost 10 percent. Tires are up 14 percent. Used cars and trucks are up 40 percent.
And then there are energy prices. Fuel oil is up 46 percent. Gas prices are up 40 percent. Natural gas is up nearly 24 percent--and on and on and on.
Predictably, inflation is having its biggest impact on those least able to afford it. A recent Penn Wharton Budget Model study found that lower-income houses, on average, faced an even greater spending increase in 2021 when compared to higher-income households, as a result of inflation.
It is no wonder 69 percent of Americans disapprove of the President's handling of inflation. Democrats have talked about wage growth. Here is the story on wages. Despite wage growth, Americans received a de facto pay cut in 2021, thanks to inflation. Between January 2021 and January 2022, real average hourly earnings declined by 1.7 percent--a pay cut.
How did we get here? Obviously, the reopening of economies and supply chain issues have created inflationary pressures for the United States and countries around the world. But a big part of the reason things are so bad in the United States today is because Democrats decided to pass a massive so-called COVID relief bill last March that far exceeded anything the economy needed. That is right. When Democrats took office last January, inflation was 1.4 percent, well within the Fed's targeted inflation rate of 2 percent.
It might have stayed there had Democrats not decided that they needed to pass a massive and partisan $1.9-trillion spending spree under the guise of COVID relief mere weeks after Congress had already passed a major COVID bill--one of five COVID bills, I might add--that passed in 2020, all bipartisan.
The definition of inflation is too many dollars chasing too few goods and services. That is exactly the situation Democrats helped create with their so-called American Rescue Plan. They sent too many dollars into the economy, and the economy overheated as a result. You don't have to take my word for it. Let me just quote a recent New York Times article:
``The United States has had much more inflation than almost any other advanced economy in the world,'' said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster.
The difference, he said--
This is Jason Furman, former Obama administration economic adviser. The difference, he said, comes because ``the United States' stimulus is in a category of its own.''
Despite all of this, despite the fact that it was Democrats' massive March spending spree that helped plunge our economy into this inflation crisis--there are still Democrats out there who want to double down-- double down--on the strategy that helped get us into this mess in the first place and pass yet another massive spending spree that would undoubtedly make this inflation disaster even worse.
``U.S. inflation highest in 40 years with no letup in sight.''
``No letup in sight.''
That was the headline. That is where Democrat policies have gotten us.
I was actually pleased to hear this morning the Democratic leader come down here and talk about inflation. It seems to be at least--maybe because of polling or whatever--starting to be realized by my colleagues on the other side of the aisle that this is an issue that is having a massive and very adverse impact on the pocketbooks of the American people, particularly low-income Americans, because, you see, inflation is a tax that hits every American, but it affects and impacts lower-income and middle-income Americans the most.
The Democratic leader said that Republicans should quit complaining about inflation and start doing something about it. Well, we obviously don't have the majority. The Democrat's solution to this, as I pointed out, is another $5-trillion spending bill. Oh, yeah, that will solve the problem. Let's flood the zone with another $5 trillion on top of the $2 trillion already out there, have even more dollars chasing fewer goods, driving inflation even higher.
One thing we can do, what Republicans have advocated, is let's end wasteful spending. Let's don't do crazy stuff. Let's don't massively expand the size of government and flood the economy with more dollars at a time when inflation is already raging. That is a really simple solution.
Another solution is not to raise taxes, which is, again, something Democrats have proposed: raising taxes by $1.5 to $2 trillion to partially--and I say partially because the cost of $5 trillion doesn't get compensated for by $1.5-trillion tax increase but tax increases, nonetheless; all of which, of course, get passed on to consumers, raising inflationary pressures even more. They want to raise taxes massively and grow the government and spend money and add about $3 trillion to the debt, which is already $30 trillion. Those are the solutions of our colleagues on the other side.
I would say, end--stop in its tracks cold--the wasteful spending. Two, don't raise taxes. Provide some certainty. Maybe even make permanent a lot of the tax relief that was put in place in the 2017 tax law. Three--how about this? How about this idea? How about we become energy independent in America, which is where we were?
We were actually exporting energy in the previous administration for the first time in American history--at least in my lifetime--where we actually had energy policies that were producing American energy on a level that was keeping energy costs low for Americans and enabling us to actually export energy to other places around the world.
That came to an abrupt end when President Biden came to office. Democrats got control of both Houses of Congress, and what happened? First thing, day one--day one in office, first day, first thing he did--President Biden canceled the Keystone XL Pipeline, which would have allowed us to get energy fuel oil from where? Our friend, our neighbor, Canada, the Canadians, and move it through a pipeline to places across the United States, helping fill the demand with additional supply that Americans need to power their everyday lives-- first thing in office, first day in office. It hasn't stopped there.
The administration decided that energy, evidently, is evil, at least if it comes from the ground, and decided to cancel a bunch of projects. There are all kinds of areas now that are off-limits to energy exploration, energy production in this country. There are lots of regulations and permitting things that are slowing down energy projects, making it more difficult, more expensive to produce American energy, leading us, leading Americans, to a place we didn't want to be, a place where we were a few years ago; but we are going hat in hand to Saudi Arabia, to OPEC countries, saying: Please, please produce more energy. We need more energy in this country.
What has happened is predictable, and what has happened is this: The demand for energy in this country is great. We are coming out of a pandemic. People are going back to work. They need, during the winter months, to heat their homes. They need fuel to get where they need to go--transportation--to work, to travel. So the demand for energy is up, the supply is going down; so what is happening?
Boom. Simple. It is really pretty simple. It is economics. The price is going up. So the price of oil in this country is now pushing $100 a barrel. Gasoline prices, as I mentioned, are up 40 percent--40 percent--over a year ago. It is simple math. It is simple economics. And there are some Democratic Senators now who are suggesting: Let's just waive the gas tax temporarily-- the gas tax which pays for all the infrastructure that we travel on in this country and which would leave a huge hole, obviously, in the highway trust fund, which is critically important to every State in the Union that depends upon the Federal Government and the highway trust fund and the fuel tax--to fund the infrastructure that enables our economy to move and keeps us competitive in the global marketplace. That is their solution.
Now, it is short-term--short-term, obviously to benefit--to try to gain some political advantage at a time when people, all of a sudden now on the other side, are starting to worry. Efforts are being led by four Democrats who are up for reelection this year. No surprise there because they have understood now what we know, and that is the American people are fed up and frustrated--fed up and frustrated with policies that are driving up the cost of everything that they have to buy, from the groceries in the store, to the rent that they pay, to the gas they put in their automobiles. Everything is going up.
Energy factors into almost everything we do. A pound of hamburger that you buy at the grocery store probably had to get there from somewhere, unless you live in the middle of the country where some of us do. But if you live on one of the coasts, you probably had to have transportation to get it to the destination, so it is factored in--it is baked in the cost of everything. When fuel prices go up, natural gas prices go up, when the cost of energy generally goes up, everything else goes up with it. It is economics.
The solution isn't a short-term political ruse to try and provide political cover to people who are running for reelection. It is to put policies in place that encourage American energy independence, that invest in American energy. That can be done in ways now with technologies we have that are environmentally friendly.
But we have to be energy independent. We can't depend upon other countries around the world that are unreliable to fuel and fund and run our economy. That investment should be here in the United States of America. And if we solve more of that, we would see less inflation, lower fuel prices.
If we end the crazy spending ideas and tax ideas coming out of the other side, we could restore some sanity to this country when it comes to these out-of-control prices, which is a tax, literally, on every American and hits particularly hard those who are struggling to make ends meet.
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