President Biden claimed Friday that fighting inflation is his “top economic priority” after data showed annual price spikes hitting another 40-year high last month — then laid the devastating economic news at the feet of Russian President Vladimir Putin, shipping conglomerates and Congress.
“Putin’s Price Hike hit hard in May here and around the world: high gas prices at the pump, energy, and food prices accounted for around half of the monthly price increases, and gas pump prices are up by $2 a gallon in many places since Russian troops began to threaten Ukraine,” Biden said in a statement issued by the White House. “Even as we continue our work to defend freedom in Ukraine, we must do more—and quickly—to get prices down here in the United States.”
The 8.6% annual inflation rate in May was a blow to Democrats’ political fortunes ahead of the November midterm elections as polls show landslide disapproval of Biden’s handling of the issue.
In his statement, Biden cited a slight decline from April in the so-called “core inflation” rate — which does not include fluctuations in prices of food and energy, the two sectors most affected by Russia’s invasion of Ukraine. But even that metric increased by 6% year-over-year in May, just above economists’ expectation of 5.9%.
Biden also ignored that inflation was high before the Russian assault on Ukraine began Feb. 24. The annual rate of inflation for that month was 7.9% after hitting 7.1% in January and 7% in December 2021.
The solution, Biden said, was more government spending — despite critics including Republicans, federal bankers and Washington Post owner/Amazon founder Jeff Bezos saying that excessive stimulus contributed to the problem.
“My Administration will continue to do everything we can to lower prices for the American people. Congress must act urgently as well,” Biden said. “I call on Congress to pass a bill to cut shipping costs this month, and get it to my desk, so we can lower the price of goods. And, I call on Congress to pass legislation to cut costs for families like energy bills and prescription drugs.”
The president then asserted, “if Congress would pass tax reform to make the wealthiest Americans and big corporations pay their fair share, we could reduce this inflationary pressure even more. These are the most significant things Congress can do to help families now and complement the Federal Reserve’s efforts to bring inflation down.”
During afternoon remarks at the Port of Los Angeles, Biden also singled out international shipping firms and fuel conglomerates for blame.
The president said that just nine shipping companies control about 90% of US imports from Asia and that they “raised their prices by as much as 1,000%.”
“The Senate passed legislation and I’m hopeful the House will act soon to crack down on these companies,” Biden said.
He also attacked oil companies, claiming that “Exxon made more money than God this year” and adding: “Exxon, start investing and start paying your taxes.”
A Quinnipiac University poll released Wednesday found that 64% of US adults disapprove of Biden’s handling of the economy, with 34% saying inflation is the most pressing national issue. The president’s overall approval rating was just 35% in the poll.
Critics often blame inflation on Biden’s policies, including his $1.9 trillion American Rescue Plan Act that bailed out state and local governments, gave $1,400 stimulus checks to most Americans, extended a $300 weekly unemployment supplement and expanded the annual child tax credit to $3,000-$3,600, up from $2,000 per child.
Biden on at least one occasion acknowledged the possible impact of generous social spending on inflation.
“The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,” he said in November. “It changes people’s lives. But what happens if there’s nothing to buy and you got more money to compete for getting [goods]? It creates a real problem.”
But on Friday, Biden claimed that the US was actually faring well compared to other countries.
“Every country in the world is getting a big bite and piece of this inflation — worse than we are and the vast majority of countries around the world,” he claimed.
However, the average Eurozone inflation rate in May was 8.1% — a half-percent lower than in the US, despite Russian fuel and food disruptions hitting that region far harder than in the Western Hemisphere.
A study released in late March by researchers at the Federal Reserve Bank of San Francisco said that in the final quarter of 2021, about 3 percentage points of US inflation — or nearly half of it at the time — may have been caused by government pandemic spending.