As Biden dithers, states are enacting meaningful inflation policy
Last week, President Biden laid out his plan for fighting inflation in an op-ed for The Wall Street Journal. But most of the president’s plan is simply a repackaging of his progressive agenda in a way to make it seem related and responsive to inflation and the economic hardship many Americans are facing.
Biden uses the first third of his 1,100-word piece to tell the American people how good things are right now. He relies on technical reports to paint a picture of a strong and prosperous nation.
But reports not cherry-picked for Biden’s article show that employment rates have dropped 8.4 percent since January 2020 and have fallen a dramatic 23.9 percent among those earning less than $29,000 a year. Biden attempts to get in front of this fact by asserting that if monthly job creation falls to one-third of its current level, it will be a sign of success.
Additionally, there is no mention of government data showing a 1.5 percent decline in real GDP in the first quarter of 2022. Amid a crumbling economy, Biden and his team are desperately trying to use ambiguous and incomplete data to convince the public not to believe what’s in plain view.
The American public’s views on the economy show that what they see is bleak. A recent CNN poll finds 77 percent of Americans rate economic conditions today as poor. More specifically, more than half of the country believes Biden’s polices have caused those poor economic conditions.
The State Policy Network’s polling shows that 95 percent of Americans are concerned about inflation, with 45 percent describing themselves as “extremely concerned.” What’s more, Gallup data indicate that the only thing Americans are more concerned about than inflation is the poor leadership in government.
Americans’ views of our country’s leadership are not surprising given President Biden’s disconnected plan to address inflation. First, he claims he won’t treat the Federal Reserve with disrespect, as he claims President Trump did, which is curiously presented as a significant step in getting aid to struggling families. Next, he proposes fighting rising energy prices with subsidies and tax credits for clean energy investment. By the White House’s own strategy, the guidelines would set goals as far out as 2030, which is unlikely to bring any fast or meaningful relief to the current situation.
On housing, Biden’s plan includes pumping billions more federal dollars into the economy, one of the chief causes of the current inflationary situation, and the centralization of financing in exchange for an increase in housing supply over the next five years. The president again misunderstands that people need relief now, not groundwork for high-cost progressive policies.
Where Biden and his administration have floundered on addressing the economic concerns of Americans, the states have stepped in. Around the country, a variety of tax reforms will give Americans more money to directly offset the high cost of energy, food and housing, rather than being filtered through government programs. Mississippi, Iowa, Kansas, Kentucky, Idaho, Indiana and Utah have all cut taxes, while Arizona courts have halted an income tax increase. New York has become the latest in a long list of states to temporarily suspend state-level gas taxes. These reforms are responsive to what Americans say they need: 65 percent of voters believe state tax relief will have a positive impact on their personal financial situation.
Six months before Biden talked about a five-year plan to increase the housing supply, Reason Magazine highlighted the progress states had made on the issue in 2021, underscoring the states’ superior ability to be responsive in a timely way during crisis. And looking forward, the Foundation for Government Accountability in Florida has laid out a key reform opportunity for governors when federal laws prohibiting work requirements for public assistance, which are artificially restricting the labor pool and raising prices, are lifted.
President Biden consistently downplayed inflation and other economic issues in 2021. Now he comes to the table with a plan that is both late and unresponsive to the real needs of Americans. Fortunately, many states continue to fill the void of the current administration. Let’s hope this is the beginning of a shift in which states take the lead on policy, as they are so often faster and more effective than the federal government.
Erin Norman is the Lee family fellow and senior messaging strategist at State Policy Network.
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