Weekly Column: Congress Must Stop Fueling Inflation Fire

Inflation has accelerated under the Biden Administration to 40-year highs, leaving Idahoans to face soaring prices for everyday expenses.  This stealth tax was exacerbated by excessive federal overspending in early 2021, and Congress must abandon reckless tax-and-spend proposals that will add more fuel to the inflationary fire.

In just one year under this Administration, consumer price inflation skyrocketed to 7.5 percent in January.  The Penn Wharton Budget Model estimates households spent $3,500 more in 2021 just to keep up with rising costs, while others estimate the average U.S. household is spending an additional $276 a month due to inflation.  Small businesses cite inflation as the biggest challenge they face, and workers’ wages are being eaten up by rising costs.  Farmers are paying significantly higher prices for crop seeds, fertilizer, equipment repairs and labor, which will inevitably drive food costs even higher.  Reports indicate western states, including Idaho, are experiencing the highest inflation rates. 

In January relative to a year earlier:

• It costs families nearly 7 percent more to put food on the table.
• Energy costs skyrocketed by 27 percent.
• The price of gas exploded by 40 percent—with the average cost of gas in Idaho up nearly $1 from a year ago.
• The bill for fuel oil to heat the family home ballooned by more than 46 percent.
• A new car costs over 12 percent more, and a used one costs almost 41 percent more.
• New clothes cost over 5 percent more.
• Home prices rose nearly 18 percent, and 27 percent in Idaho, from the end of 2020 to 2021.

Economists agree the Democrats’ American Rescue Plan poured $2 trillion of inflationary fuel on an already overheating economy, and has been a significant contributing factor to the price spikes since the beginning of the Biden Administration.

Inflation also has a negative impact on the federal budget, including increased interest expense that crowds out a host of other national priorities, from low-income support programs to national defense to disaster relief.  As Ranking Member of the Senate Finance Committee, I have asked the Congressional Budget Office for detailed information on these harmful effects.

Rather than considering further damaging measures, such as more untargeted federal spending, wage and price controls, and tax hikes, Congress should be taking practical steps to address runaway inflation.  We should ensure the Federal Reserve attends to its low-and-stable inflation mandate without allowing politics to enter decision-making; exercise greater discipline over spending, deficits, debt and our broken budget process; expand trade opportunities; streamline federal regulation; and protect the tax reforms implemented under the Tax Cuts and Jobs Act of 2017, which led to record high levels of business investment, historic lows in unemployment and poverty, and record high incomes during the past Administration.

I am deeply proud of our great state, where Idahoans have worked together to build a magnet for ingenuity, growth and free enterprise.  At 2.4 percent, Idaho’s unemployment rate is far below the national average, and total employment in Idaho grew by 21,730 net new jobs over the past year.  Washington, D.C., should take note, and take steps to address the harmful effects of inflation, tackling our ballooning debt crisis and the unsustainable mandatory spending that will undermine Idaho’s successes.

# # #

Word Count: 534