Happy Wednesday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.
Today’s Big Deal: The top two U.S. economic policymakers admitted they didn’t see inflation lasting as long as it has. We’ll also look at a potential government shutdown over vaccine mandates and President BidenJoe BidenCarville advises Democrats to 'quit being a whiny party' Wendy Sherman takes leading role as Biden's 'hard-nosed' Russia negotiator Sullivan: 'It's too soon to tell' if Texas synagogue hostage situation part of broader extremist threat MORE’s latest moves to keep supply chains moving.
But first, find out why Bill Nye was hanging with Biden.
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Let’s get to it.
Officials say they misjudged supply snarls
Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet YellenJanet Louise YellenThere's still time to stop Biden's global minimum tax grab House Democrats call on Biden to unfreeze Afghan central bank reserves On The Money — Presented by Citi — Build Back Better...late than never? MORE on Wednesday said they underestimated how quickly the U.S. economy would rebound from the COVID-19 recession and strain supply chains.
- During a Wednesday hearing before the House Financial Services Committee, the top two U.S. economic policymakers acknowledged that high inflation has risen higher and lingered much longer than they expected.
- Both Yellen and Powell said substantial fiscal and monetary stimulus played a role in stoking the higher demand that fueled inflation, but they called it a challenging side-effect of an otherwise fast recovery.
“Inflation is a matter of demand, and it's certainly true that the American Rescue Plan put money in people's pockets, helped them meet expenses that they had, and contributed to strong demand in the U.S. economy,” Yellen said, referring to the $1.9 trillion March stimulus bill signed by President Biden in March.
“But if you look at the amount of inflation that we have and its causes, [the stimulus bill] is, at most, a small contributor,” she continued. “It's enabled their spending, but the fact that their spending — because of the pandemic — has been so focused on goods as opposed to services has contributed massively to the supply chain problems.”
LEADING THE DAY
Senate Republicans clash over government shutdown strategy
Senate Republicans on Wednesday battled over a proposal floated by Sen. Mike LeeMichael (Mike) Shumway LeeSchumer ramps up filibuster fight ahead of Jan. 6 anniversary Juan Williams: The GOP is an anti-America party Manchin faces pressure from Gillibrand, other colleagues on paid family leave MORE (R-Utah) and Sen. Roger MarshallRoger W. MarshallThe Hill's Morning Report: Biden takes it on the chin GOP senator plans to introduce FAUCI Act after clash at hearing Scientists, medical professionals defend Fauci after heated exchanges with Republicans MORE (R-Kan.) to block a short-term government funding deal unless they get a vote on an amendment to stop the Biden administration from implementing its vaccine mandate for large employers.
- Republican lawmakers described the meeting as contentious as Lee and Marshall refused to back down from their threat to drag out consideration of the government funding bill.
- Their plan: Use a shutdown as leverage to get Senate Majority Leader Charles SchumerChuck SchumerRomney: I never got a call from White House to discuss voting rights Kyrsten Sinema's courage, Washington hypocrisy and the politics of rage Joe Biden's disastrous 48 hours MORE (D-N.Y.) to agree to a vote on their amendment.
- House conservatives are also pushing for a similar showdown in the lower chamber.
But many Senate Republicans are skeptical of the idea. They fear that they could get blamed for a shutdown if things spiral out of control and point out that in any case the Senate will be voting next week on a resolution to nullify Biden’s employer vaccine mandate under the Congressional Review Act.
Alexander Bolton has the latest here.
Biden: 'We're heading into a holiday season in very strong shape'
President Biden on Wednesday said that the U.S. economy is heading into the holiday season in strong shape, touting his administration’s work to address supply chain issues.
“We’re heading into a holiday season in very strong shape. It’s not because of luck. We averted a potential crisis by figuring out what needed to get fixed, and then we brought people together to do the hard work of fixing it,” Biden said in remarks at the White House.
He pointed to efforts by his administration to speed up operations at ports, break up logjams to transport goods from ports to homes, and eliminate fees when truck drivers enter ports to pick up containers at night or over the weekend.
“If you watch the news recently, you might think the shelves in all our stores are empty across the country, that parents won’t be able to get presents for their children this holiday season. But here’s the deal: For the vast majority of the country, that’s not what’s happening,” he added.
Alex Gangitano has more here.
Good to Know
Democrats are clamoring to keep their climate priorities in the spending bill passed by the House as Sen. Joe ManchinJoe ManchinDemocrats make voting rights push ahead of Senate consideration Sunday shows - Voting rights legislation dominates Kaine says core of spending bill will pass but most of it is 'dead' MORE (D-W.Va.) pushes for adjustments.
Here’s what else have our eye on:
- Growth in private payrolls beat analyst estimates in November, according to a new report from a payroll processing firm, with private businesses hiring 534,000 new employees last month.
Advocates are mounting a final push to ensure that Senate Democrats don’t strip the national paid leave program out of the party’s $2 trillion climate and social spending bill.
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.