Democrats see inflation as growing problem for their agenda  

Democratic lawmakers are acknowledging that rising inflation is becoming a significant political problem that is adding to the difficulty of reviving President Biden’s agenda.  

Senate Democrats are discussing the possibility of trying to resuscitate the Build Back Better Act, or major parts of it, as soon as next month but that timeline is now in more doubt than ever after a new report showed that inflation is rising faster than expected.  

The Bureau of Labor Statistics reported Thursday that prices have risen 7.5 percent over the past year and 0.6 percent from December to January, exceeding expectations that annual inflation and month-to-month inflation would come in at 7.2 percent and 0.4 percent, respectively.  

The price indexes for food and energy rose at an even faster clip, 0.9 percent. 

Sen. Joe Manchin (D-W.Va.) on Thursday said the latest numbers are all the more reason Democrats shouldn’t turn back to the negotiations over Biden’s Build Back Better agenda anytime soon.  

“Right now inflation should get everyone [on] high alert,” he told reporters before a vote. “The market can’t handle it. You can’t keep throwing fuel on the fire. You just can’t do it.”  

Asked to confirm whether he’s informed colleagues that he doesn’t want to return to negotiations over Build Back Better, he said, “I’ve been very clear about everything.”  

Other Senate Democrats acknowledge that rising inflation is becoming a bigger political problem that doesn’t bode well for Biden’s plan to pass another spending package that would be well in excess of $1 trillion.  

“Clearly we’d like to see that go down, I think the Fed’s got to act,” said Sen. Mark Warner (D-Va.).

As for what inflation means for Build Back Better, he replied: “Nothing comes easy.” 

“Obviously the inflation numbers don’t make it easier,” he added.  

Sen. Jon Tester (D-Mont.) said the possibility of dramatically shrinking the size of Biden’s climate and infrastructure spending package is “always on the table” to respond to inflation fears.  

But he also pointed out that might not be necessary if Democrats can successfully make the case that Build Back Better will address inflation by helping middle-income Americans lower their costs.  

“There are things that can help reduce inflation in BBB, childcare, housing, those kind of things but I do think we need to look at it from how we can help reduce costs for families,” he said.  

“Anytime you have inflation numbers that are high, that’s an issue we need to take seriously,” he said.  

Rising inflation has also fueled talk among centrist Democrats about setting aside a portion of the money raised by tax increases on deficit reduction instead of using it to spend on new social programs.  

“I think it would be a good idea to cut the deficit,” Tester told reporters on Tuesday.  

Senate Republicans see rising prices as a major issue heading into the midterm elections that will help their candidates and hurt Democrats.  

“It turns out inflation this past year hasn’t been seven percent. It’s been seven and a half percent. In other words, if you haven’t personally gotten a pay raise of eight percent or more in the last year, then Democrats’ policies have given you a pay cut,” Senate Republican Leader Mitch McConnell (Ky.) said on the Senate floor. 

In a sign that vulnerable Democrats are feeling pressure to respond to surging prices, Sens. Maggie Hassan (D-N.H.) and Mark Kelly (D-Ariz.) on Thursday announced a proposal to suspend the federal gas tax through the end of the year. That would knock 18.4 cents off the cost of a gallon of gas until January.  

Sen. Catherine Cortez Masto (D), who also faces a tough race in Nevada, cosponsored the legislation.  

“I’m committed to finding solutions that bring our families some much-needed relief at the pump and help them get ahead,” she said in a statement.   

Cortez Masto was peppered by questions from reporters after lunchtime Thursday about whether Build Back Better would add to inflation.  

She argued that Build Back Better couldn’t be blamed for the latest numbers because it “didn’t pass” and instead pointed to “the pandemic that we’re dealing with right now” and “supply chain issues.”  

Asked if she saw Build Back Better as something that could fuel more inflation, she asserted “there are some anti-inflationary measures in that,” citing the compromise to lower some prescription drug costs.   

Sen. Tim Kaine (D-Va.) said the latest inflation reading will put pressure on Democrats to limit whatever package they advance to proposals that will lower the cost of living for average Americans, such as a proposal to empower Medicare to negotiate lower prescription drug prices, something that Biden touted Thursday at an appearance in Culpepper, Va.  

“I think it will pass in a pared-down version,” he said. 

He said the legislation will likely include provisions addressing climate change, a scaled-down proposal to lower prescription drug costs, funding for expanded access to childcare and pre-kindergarten, and workforce development funding.  

He said the rising inflation numbers “impacts the content of the bill.” 

“That may shape what makes the final cut,” he added. “The items that really have cost reduction capacity on the things that really hit people’s pocketbooks are probably going to rise to the top of the to-do list.” 

That makes it all-but-impossible to include a proposal to raise or eliminate the cap on state and local tax deductions, a top priority of Senate Majority Leader Charles Schumer (D-N.Y.) and House members from New York and New Jersey, Democratic senators say.  

Kaine said the proposal to raise the SALT cap “has never been my priority.” 

Biden argued during a visit to Virginia’s 7th congressional district, which is represented by vulnerable Rep. Abigail Spanberger (D), that his climate and social spending agenda would “bring down the cost for average families.”  

And he insisted that it “will not increase the debt.”  

But claims by the White House and Democratic leaders that Build Back Better will lessen the impact of inflation isn’t persuading Manchin, who has repeatedly warned about the impact of rising prices on middle-class and lower-income families in his state.  

Manchin in a statement Thursday warned that inflation is “draining the hard-earned wages of every American, and it’s causing real and severe economic pain that can no longer be ignored.”  

“We all have a responsibly to do all that is possible to roll back inflation and manage our debts because the longer we or the Federal Reserve waits to act, the more economic pain will be caused,” he said.