Politics: Inflation poses new challenges for progressives

How Democrats Got Desperate

  How Democrats Got Desperate Progressives gave President Joe Biden a partial victory by passing his infrastructure bill, but the fate of the rest of their agenda remains as uncertain as ever.For months, the feisty left flank of the House Democratic Caucus insisted it would not provide the votes to pass Joe Biden’s $1.2 trillion bipartisan infrastructure package until the Senate first approved the rest of the president’s economic agenda. At minimum, progressives said, all 50 Senate Democrats—and especially the chamber’s two most centrist members, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona—would have to at least commit to Biden’s “Build Back Better” plan.

The sharp increase in inflation could pose a challenge for progressives as they push to enact a robust social spending and climate package.

Rep. Pramila Jayapal (D-Wash.) arrives for a closed-door Democratic caucus meeting on Wednesday, November 3, 2021. © Greg Nash Rep. Pramila Jayapal (D-Wash.) arrives for a closed-door Democratic caucus meeting on Wednesday, November 3, 2021.

The Labor Department reported Wednesday that the Consumer Price Index (CPI) increased by 6.2 percent in the 12-month period ending in October, the biggest increase since 1990.

The data quickly caught the attention of Sen. Joe Manchin (D-W.Va.), who has already raised concerns about the size and the timing of the spending bill. Republicans are also highlighting the data in an effort to pressure moderate Democrats to oppose the legislation.

Crippling Inflation Could Kill Joe Biden's Build Back Better Bill

  Crippling Inflation Could Kill Joe Biden's Build Back Better Bill Senator Joe Manchin has previously suggested a multi-trillion dollar spending package could worsen inflation.The Consumer Price Index for October recorded a 6.2 percent increase year on year in figures published by the Bureau of Labor Statistics on Wednesday, with notable rises in the price of food and energy.

Concerns from moderates could make it harder for progressives to get as many of their priorities into the spending package, known as the Build Back Better Act.

Progressives and key Democrats are countering inflation-related criticisms arguing that the measure could help address Americans' concerns about the cost of goods and services.

Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, said Thursday that there are several aspects of the spending bill that would help cut costs for Americans, such as provisions on limiting child care costs, providing universal pre-K and lowering the price of prescription drugs.

"Those are the things that are going to immediately affect people's pocketbooks, and that is why it is so important to pass the Build Back Better Act, which I think is actually going to help people survive through this time of recovery," Jayapal said on MSNBC's "MTP Daily."

Wages are rising, but so are consumer prices. Is this a wage-price spiral?

  Wages are rising, but so are consumer prices. Is this a wage-price spiral? When the consumer-price index helps drive inflation in the U.S. to levels not seen in 31 years, concerns of a wage-price spiral have increased. The forces at work are clear to anyone who's shopped recently.

Democrats have been negotiating for months over the size and the contents of the spending package because every Senate Democrat and nearly every House Democrat will have to be on board for it to pass.

Already, progressives have had to make compromises to satisfy moderates like Manchin. Progressives such as Sen. Bernie Sanders (I-Vt.) initially wanted a package that included $6 trillion in spending and tax cuts, and Democrats later zeroed in on a $3.5 trillion topline number. However, Manchin and Arizona Democrat Sen. Kyrsten Sinema balked at the size of the bill and how it would be paid for.

The White House then came back with a $1.75 trillion framework for the legislation. On top of the price cut, progressive priorities such as clean electricity standard and a Medicare dental benefit are unlikely to be included in the final package.

House progressives also recently abandoned their insistence that the Build Back Better Act and a bipartisan infrastructure bill pass the House at the same time.

Joe Manchin and Larry Summers were both right about inflation but disagree on Biden's agenda. Who's right will determine the path of his presidency and the economy.

  Joe Manchin and Larry Summers were both right about inflation but disagree on Biden's agenda. Who's right will determine the path of his presidency and the economy. Manchin and Summers were both right to argue that inflation is bad and getting worse, but they disagree on Build Back Better. The stakes are massive.He's in his 60s or 70s, and he remembers when inflation was terrible in the 1970s - he's been warning about it ever since Joe Biden was elected president.

Earlier this month, progressives struck a deal with a group of moderate House Democrats that paved the way for a vote on the "traditional" infrastructure bill in exchange for a commitment that the moderates will vote for the social spending package when they receive more information about the cost of the bill from the Congressional Budget Office (CBO).

Despite Democrats' concessions in the new framework, Manchin has yet to endorse the spending bill. He has for months cited inflation as a reason to have a smaller package and for Congress to take a "pause" in action on it.

He amplified his concerns about inflation after Wednesday's data was released.

"By all accounts, the threat posed by record inflation to the American people is not 'transitory' and is instead getting worse," he said in a tweet. "From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day."

It's possible that additional progressive priorities be removed from the package or Manchin's opposition could stall its movement in the Senate.

Opinion: Biden has to do a whole lot more on inflation

  Opinion: Biden has to do a whole lot more on inflation For all the attention that has been paid to education wars, the anti-vaccination movement or the fallout from Afghanistan, prices might turn out to be the biggest issue going into 2022, writes Julian Zelizer.In a speech at the Port of Baltimore this week, President Joe Biden acknowledged that inflation was "worrisome." With consumer prices increasing 6.2% over the last 12 months, the administration understands that it has a problem on its hands. Of course, the primary concern is the economic health of the nation.

"Manchin is of course going to use inflation (or anything else he can point to) to make his case, but his concerns have predated the uptick in inflation and he's been stymieing Biden's agenda at every turn," said Lindsay Owens, executive director of the Groundwork Collaborative, a progressive economic policy group.

Nonetheless, Jayapal was optimistic about the Build Back Better Act's prospects during her MSNBC interview.

She expressed confidence that the House moderates would vote for the chamber's bill once they received information from the CBO.

"Everyone's been talking about how important it is for our constituents," she said.

Jayapal also said that most of the items in the House bill have been "preconferenced" with the Senate, and that the few remaining items "should be the only things left on the table."

"We should get it passed and deliver for the American people," she said.

One of those remaining items is paid family leave, which the House has included in its version of the bill, but Manchin has indicated he will oppose it.

Other progressive lawmakers have argued that provisions in the social spending package will assuage the pinch of inflation and other financial challenges Americans face.

Prior to the release of the latest inflation data, Rep. Alexandria Ocasio-Cortez (D-N.Y.) said that enacting the spending bill and the infrastructure bill is the "bare minimum" action Congress could take to address inflation.

CNN Host Confronts Biden Adviser on June Remark Inflation Would 'Pop Up' and 'Go Back Down'

  CNN Host Confronts Biden Adviser on June Remark Inflation Would 'Pop Up' and 'Go Back Down' "Do you think that you and the president were wrong?" Jake Tapper asked White House economic adviser Brian Deese on Sunday.Biden said at the time, "By the way, talk of inflation, the overwhelming consensus is it's going to pop up a little bit and then go back down.

"If you are worried about inflation, it's important to understand why it's happening: supply chain, labor, and healthcare complications. We can address these issues by investing in infrastructure, wages, healthcare &benefits," she tweeted.

Rep. Don Beyer (D-Va.), the chair of the Joint Economic Committee who is a member of both the Congressional Progressive Caucus and the more centrist New Democrat Coalition, said in a statement to The Hill on Friday Biden's domestic agenda "will help keep prices down by easing bottlenecks and increasing productivity and workforce participation - enabling us to build an economy that is strong, stable and broadly shared."

"I strongly recommend that my colleagues who are concerned about inflation consider the many ways the Build Back Better Act would help alleviate the negative impacts on their constituents," he said.

Progressives are joined by the White House and congressional Democratic leaders in arguing that the Build Back Better Act will help to reduce costs.

"Price increases are all the more reason we should act decisively to lower the expenses that weigh heaviest on working families - from child care to prescription drugs to housing - by passing the Build Back Better Act," said Henry Connelly, a spokesperson for Speaker Nancy Pelosi (D-Calif.).

A number of progressive economic policy experts argue that the social-spending package won't increase inflation, noting that the spending in the bill would occur over a number of years and is expected to be fully paid for.

They also noted that Larry Summers, a former economic adviser to President Obama who has recently criticized the Biden White House, has said that the social spending bill won't contribute to inflation.

"There's not really a good argument for the idea that Build Back Better would make inflation worse," said Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute.

"There are good arguments that Build Back Better, by helping with the supply capacity of the economy, by helping people work more and work better, that it could help deal with inflation and other supply constraints in the economy in the medium term."

Progressives also took issue with Manchin's inflation concerns and urged him to get on board with the spending package.

"If Joe Manchin is truly concerned about the money in people's pockets and bank accounts of people in West Virginia, nothing could be better than child tax credit checks, help with child care and creating millions of new jobs," said Adam Green, co-founder of the Progressive Change Campaign Committee.

Inflation narrative is flawed .
There's a big problem with the current inflation narrative: It may not be the whole story. Beyond the Covid-19 pandemic, surging demand and supply chain issues, there's also the roles played by corporate America, President Joe Biden and the Federal Reserve.The inflation narrative is largely set. The coronavirus pandemic created supply chain snarls. It put production out of whack. As demand has roared back following Covid-19 lockdowns, prices have soared.

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