WASHINGTON — President Joe Biden’s top economic adviser on Sunday sought to make the case that passing a second massive infrastructure bill, focused on child care, elder care and climate change, will play a part in easing the record level of inflation the country is experiencing.
White House National Economic Council Director Brian Deese, making the rounds of the Sunday show circuit, argued that the $1.75 trillion bill known as the Build Back Better Act will help "address the core costs that American families are facing in child care, in housing, in health care."
"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, this legislation that the House is going to consider this week," Deese told CNN’s "State of the Union." "This, more than anything, will go at the costs that Americans face."
Deese’s assertions came days after data from the Labor Department indicated the overall cost of staple goods and services increased by 0.9% last month, a larger jump than the 0.5% increase most economists were projecting. The price of goods and services has increased 6.2% over the past 12 months, according to the Labor Department data released last Wednesday — the highest annual increase since 1990.
Biden on Monday is slated to sign into law a $1.2 trillion bipartisan infrastructure bill to upgrade the nation’s roads, bridges and transportation hubs, but the president continues to push Congress to act on a $1.75 trillion social spending package that would provide free prekindergarten, assistance with child care costs for most families, and expanded Medicaid assistance for seniors requiring home care services.
The House is expected to take up a vote on the second package this week, but Sen. Joe Manchin (D-West Va.), a critical swing vote in the evenly split Senate, has already voiced his objections to paid family leave being included in the House version of the bill, and last week raised concerns about the potential impact of the bill on the current inflation rate.
Republican lawmakers have argued that the billions of dollars in federal spending will trigger additional inflation, but White House officials have pushed back on those claims, pointing to a letter co-signed in September by 17 Nobel Prize-winning economists who said the measures will not lead to long-term inflation.
"What does it do when you expand Medicare? What does that do to the solvency? And Joe Manchin asked the question about inflation. What is this going to do to inflation?" said Rep. Fred Upton (R-Mich.) on CNN when asked about the bill.
Deese, asked about the GOP concerns, argued Biden’s infrastructure agenda will not increase inflation, noting that the proposal is paid for by tax increases on the nation’s top earners.
"You don’t impact inflation, what you do is you actually increase the productive capacity of our economy," Deese told ABC’s "This Week." "You get more people to work by providing affordable childcare and affordable care for an elderly parent."
Treasury Secretary Janet Yellen, appearing on CBS’ "Face the Nation" said the pandemic continued to drive the economy, and would be the key factor to easing inflation.
Asked if she was confident consumer prices will be down by next November and the midterm congressional election, Yellen said "it really depends on the pandemic."
"The pandemic has been calling the shots for the economy and for inflation," Yellen said "If we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do. I think it's important to realize that the cause of this inflation is the pandemic. It all but shut down our economy. It boosted unemployment to almost 15% and we've been opening up in fits and starts."