The government of the President of USA, Joe Bidenfeel more and more that they have little control over inflation in the short term, officials say, and is looking for ways to offset the political risk of price hikes in the months leading up to the November election.
Last week’s data showed that inflation still at 40-year highs, but slightly below a previous peak.
The economy and Biden’s stewardship are important issues for voters, and lowering the cost of meat, gasoline and other basics is a key way Democrats can defend control of Congress in the midterm elections. November, strategists say.
But the ability of any American president to reduce prices in the short term in world markets, from the Petroleum until the cerealsis limited, White House advisers say.
The influence on supply chain bottlenecks related to lockdowns in China for him Covid-19 and the Russian invasion of Ukrainewhich are driving up prices, are even further out of reach, they say.
The government expects inflation to slow from its breakneck pace as the year progresses, advisers said, but not to a level considered acceptable.
In response, the White House, which until recently portrayed rising inflation as transitory, has developed a three-pronged strategy: act as aggressively as possible on prices that it believes may impact margins, underscore the role of russian president Vladimir Putin and the pandemic, and criticize the Republicans, suggesting that their economic policies would be worse.
The change in message comes after some Democrats told the White House that it was slow to react to the political problem of inflation. Democrats say it’s too early to tell whether the new message will sway voters.
“There was an excess of promises and a lack of fulfillment,” he said. Jason Furmaneconomics professor at Harvard University and former Senior Advisor to the President Barack Obama. “Now the messages are more realistic.”
Political strategists say it’s important for Biden to communicate empathy and action even in the absence of good options, as a divided GOP unites around attacking the president over “Bidenflation.”
Republicans blame Biden’s $1.9 trillion bailout and other policies for fueling inflation, though prices began to jump before he took office and the phenomenon has been global.
Decrees, messages
For its part, the Biden White House has criticized companies for taking home record profits and buying back shares while charging high prices.
It has also tried to increase competition in sectors such as meat, partnering with retailers to unclog supply chains at ports and railways, and releasing oil from strategic reserves to try to lower prices.
The White House’s strategy heading into the Nov. 8 election is to identify and use as many executive orders as possible to ease Americans struggling with high costs.
Future actions could range from student loan relief to temporary suspension of income taxes. gasoline during vacations and allowances for healthcare.
Other possible measures, notably cutting import tariffs, would lower costs somewhat, but are fraught with political risks of their own and may not significantly alter fundamental inflation dynamics, officials said.
What’s off the menu? The reform of the immigration. Biden proposed a sweeping package of reforms in 2021 that would have allowed more workers to fill a national labor shortage that has pushed up wages and prices, but the legislation has failed to advance in Congress.
The restrictive immigration policies adopted under the previous administration were maintained by Biden, including restrictions on the Covid-19.
The policy changes prevented the entry of an estimated 3.4 million more immigrants into USA between 2016 and 2021, according to calculations by the Federal Reserve Bank of Kansas Citywhich contributed to the shortage of workers.
Biden will continue to emphasize the role the Fed plays in controlling prices, the officials said. He will also underline his support for the central bank’s move to sharply raise interest rates.
In addition, he plans to highlight the inflationary impact of the blockade on Ukrainian grain exports by Russia and what, according to him, is the necessary cost of isolating Putin with measures such as restricting the use of Russian oil, even if they increase prices for Americans.
Meanwhile, the Democrats will continue to tell voters that the Republicans have no serious political plans.
Republicans have not endorsed any detailed recommendations to tackle inflation, but support cutting taxes and budget deficits, as well as easing regulations for oil and gas producers.