Note: The following is Sen. Roger Wicker’s Weekly Report and is provided by his office.
High Spending Has Driven Up Prices, Hurt Savings
The Labor Department recently issued a bleak report confirming that the cost of living in America is skyrocketing. Americans were already facing higher prices at the gas pump, in the grocery store, and throughout daily life coming out of the pandemic. But instead of improving, the trend has gotten worse. Prices rose by 5.4 percent over the previous year – the largest 12-month increase since the financial crisis of 2008. Even worse, American producers sold their goods at prices 7.3 percent higher than a year ago, indicating we are running headlong into inflation.
Mississippi is being hit particularly hard. The Labor Department reports that in our region, the price of goods went up by 7.3 percent. Mississippians are now paying a lot more for a tank of gas, a gallon of milk, and basic necessities.
Biden Stimulus Leads to Higher Cost of Living
This massive price surge can be traced in large measure to congressional Democrats’ decision to spend $1.9 trillion in unnecessary “COVID relief” back in March. This decision came directly after the Republican-led Congress had passed five COVID relief bills in 2020 that were negotiated and passed with overwhelming bipartisan support. Unlike those bills, the Democrats’ package was excessive, poorly targeted, and encouraged many workers to stay home with a government check rather than rejoin the workforce. It also saturated the economy with newly printed money, leading to our current situation in which there are more dollars chasing fewer goods.
We warned our Democrat colleagues back in March that their spending plans would overheat the economy. Even Larry Summers, a longtime Democrat advisor who served under Presidents Obama and Clinton, said this unnecessary stimulus could cause inflation. Although we are nearly out of the pandemic, the Federal Reserve is continuing to print money to keep up with spending by congressional Democrats. In fact, since the pandemic began, the number of dollars in our economy has increased by a staggering 31 percent.
This flood of cash from Washington is causing American earnings, bank accounts, and 401ks to shrink as a share of the economy. The loss of buying power is making it harder for Americans to afford a home, support a growing family, and simply put food on the table. It could take months and even years for earnings to catch up with inflation. And when they do, many Americans may find themselves pushed into a higher tax bracket – paying more in taxes and earning less value in take-home pay. This is the hidden tax many Americans will feel because of President Biden’s inflation policies.
Democrats Call for More Trillions
President Biden and his party’s leaders should be sobered by these recent developments. The surging prices across our economy are an early alarm bell that Democrats’ big spending agenda will invite runaway inflation, in addition to saddling our children with ever-growing debt.
Unfortunately, Senate Majority Leader Chuck Schumer recently announced plans for a $3.5 trillion spending bill that will dwarf any bill Congress has ever passed. Sen. Schumer hopes to force this legislation through the Senate on a razor-thin party-line vote. If passed, this legislation would all but certainly throw our economy into more of an inflationary spiral – further eroding family savings and driving up the cost of living. I am urging Senate Democrats not to take this unwise path.