On The Money — New figures suggest inflation may be at turning point
New inflation figures suggest rising prices may finally be at a turning point. We’ll also look at GOP attacks targeting the large boost in funding for a sprawling Democratic package, a recent warning to House lawmakers about TikTok as campaign season heats up, and more.
But first, Elon Musk is being Elon Musk.
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Inflation could be at a turning point
Inflation didn’t rise between June and July according to new figures from the Labor Department’s consumer price index (CPI), the first numbers in some time that suggest rising prices may finally be at a turning point.
Prices aren’t actually going down. In fact, the new figures, while unchanged from June, were 8.5 percent higher than they were a year ago. That’s still near a 40-year high, though it’s also a dip from the 9.1 percent increase that occurred from June of last year to June of this year, according to the CPI.
- More importantly, core inflation, which doesn’t count price increases in the particularly volatile categories of energy and food, held constant at 5.9 percent annually and was only up 0.3 percent compared to last month.
- That’s pretty much in line with the month-to-month changes in core inflation that happen under more “normal” economic circumstances when annual inflation is closer to 2 or 3 percent.
- As a result, there’s a sense that the new numbers could be pointing to a change, even if there’s not enough information yet to be more hopeful.
“We are at a major turning point in terms of inflation,” said Brian Bethune, an economist at Boston College, who in an interview with The Hill called the figures a “good sign.”
“It’s one month. One month does not make a trend — you’re going to hear that a thousand times, but I also project that the inflation rate will moderate in August, because we’re seeing further declines in gasoline prices. So, it’s looking like we’ve turned a corner,” he said.
But there are reasons to be cautious.
The Hill’s Tobias Burns has more here.
LEADING THE DAY
GOP rails against IRS funding in Inflation Reduction Act
Republican lawmakers are fuming about the large boost in funding for the IRS included in the $400 billion tax, health care and climate package passed by Democrats in the Senate over the weekend.
The bill provides nearly $80 billion to strengthen the IRS, more than half of which will go specifically to increased enforcement efforts such as audits. Twenty-five billion will go toward operational support, nearly $5 billion will go toward new technology and
$3 billion will go to services for taxpayers, like making IRS agents available to answer questions over the phone.
- During the extended voting session of the Senate that lasted well into Sunday, Sen. Mike Crapo (Idaho), top Republican on the Finance Committee, unsuccessfully filed an amendment to the bill to explicitly prevent the IRS from using the additional enforcement funding on taxpayers who earn less than $400,000 per year.
- While the amendment was shot down by Democrats in the Senate, IRS chief Charles Rettig wrote identical letters to the House and Senate last week stressing that the new enforcement funding would comply with an order from the Treasury Department to make sure that audit rates of people making less than $400,000 a year would not rise.
- But, despite Rettig’s reassurances, House Ways and Means Committee ranking member Kevin Brady (R-Texas) expressed doubt that the agency would be able to keep its word and focus on rich taxpayers.
Republicans have stated that the funding boost is going to be used to hire 87,000 new IRS agents. The number is likely speculative, and was picked up after the Republican National Committee cited a figure from the right-wing advocacy group Americans for Tax Reform.
Burns has the details here.
SLOW YOUR SCROLL
House administrators warn lawmakers against TikTok use
The House’s Chief Administration Officer is warning lawmakers of security concerns tied to TikTok as campaign season fuels interest in the app.
While primarily known for viral dance videos and dishing up a lighter side of the internet, lawmakers have been flocking to the app, seeing an opportunity to reach new and different demographics — especially younger voters.
- But as lawmakers increasingly jump at the chance to be content creators, the operational office for the House issued a stern warning with a new cyber advisory.
- “The ‘TikTok’ mobile application has been deemed by the CAO Office of CyberSecurity to be a high-risk to users due to its lack of transparency in how it protects customer data, its requirement of excessive permissions, and the potential security risks involved with its use,” the office wrote in a memo released Tuesday.
The Hill’s Rebecca Beitsch has the rundown here.
Facebook profits from ads on searches for hate group pages: report
Facebook has profited from searches and ads for white supremacist groups on its social media platform, according to a report released Wednesday from the Tech Transparency Project (TTP).
The TTP investigation found ads monetizing search results for some white supremacist groups, of which there are more than 80 using Facebook as a hub, according to the report. The ads weren’t for the white supremacist groups themselves, but generated revenue for the social media giant when they appeared in searches.
- A Facebook spokesperson said on Wednesday that the platform has corrected the issue. The 80-group count found in the report amounts to more than a third of 226 total white supremacist groups labeled as hate groups by the Southern Poverty Law Center, the Anti-Defamation League and Facebook.
- Even with clear flags of white supremacy like “Ku Klux Klan” in the name, searches for some groups showed users ads for Black churches, which the TTP flagged as possibly “highlighting potential targets for extremists.”
The Hill’s Julia Mueller breaks it down here.
Good to Know
Walgreens helped fuel the opioid epidemic in San Francisco by dispensing hundreds of thousands of prescriptions without performing adequate due diligence, a federal judge ruled Wednesday.
U.S. District Judge Charles Breyer found that over the course of a 15-year period, Walgreens pharmacists did not stop or flag suspicious orders, including tens of thousands from doctors with suspect prescribing patterns.
Here’s what else we have our eye on:
- China officially announced an end to its war games around Taiwan on Wednesday, but said its military would continue with further “training and war preparation.”
- Landfills are responsible for methane emissions equivalent to that of hundreds of thousands of cars, according to research from the SRON Netherlands Institute for Space Technology.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.