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Tag: covid 19 relief
Federal Reserve Bank of Cleveland

Why I’m Not (Very) Worried About Inflation

For a long time, inflation has been the phantom of the American economy: often expected but never seen. But the latest Consumer Price Index, which showed that prices rose by five percent from May of last year to May of this year, raises fears that it is breaking down the front door and taking over the guest room.

The price jump was the biggest one-month increase since 2008. It appears to support the warning of former Treasury Secretary Larry Summers, who wrote in February that President Joe Biden's budget binge could "set off inflationary pressures of a kind we have not seen in a generation." Senate Republican leader Mitch McConnell charged last month that the administration has already produced "raging inflation."

For anyone who lived through the turbulence of the 1970s, when the CPI climbed year after year, peaking at a rate of more than 13 percent, the specter of inflation is enough to induce night terrors. One of the great governmental marvels of the past 40 years was the Federal Reserve's complete conquest of this malady. To let it return would be a grievous setback.

There are reasons to think that could happen. The Fed has pumped huge sums of money into the economy to offset the effects of the pandemic, and the Biden administration got Congress to approve a huge economic relief package. Americans saved a lot over the past year, and if they decide to burn through all that cash, they could push prices still higher.

At this point, though, watchful concern is a more appropriate attitude than outright alarm. For now, I'm not worried — not very worried, anyway — about inflation.

Why not? One reason is that a spike in prices is not inflation any more than a stretch of rain is Noah's flood. It's no surprise that prices in May were appreciably higher than a year earlier — when much of the economy was shut down because of the pandemic.

Prices will keep going up as life continues to return to normal and Americans rush to spend money on all the things they missed because of COVID-19. Lingering supply chain snarls will put additional pressure on prices. But this should be a one-time phenomenon. Inflation is not inflation unless it persists over months and years.

Another reason for optimism is that even when it was trying to raise the inflation rate, during and after the Great Recession, the Federal Reserve found it remained stubbornly low. The central bank's monetary expansion should have brought about the higher inflation it sought. But it didn't — suggesting that something has changed about the connection between the money supply and consumer prices.

Back then, conservative critics forecast an outbreak of inflation caused by easy money and excessive federal spending. In 2009, economist Arthur Laffer wrote, "We can expect rapidly rising prices and much, much higher interest rates over the next four or five years." Sen. Rand Paul (R-KY) said Americans should be "prepared to carry money to the grocery store in a wheelbarrow."

Let's hope their hallucinations have subsided. If those policies didn't cause inflation then, they may not cause it now. Stable prices have become the intractable norm over the past quarter-century, for reasons we don't fully understand. Loose fiscal and monetary policies don't seem to matter the way they once did.

One danger is that the recent price increases will fuel inflationary expectations, prompting businesses to raise prices and workers to demand higher wages, setting off a self-perpetuating upward spiral. But what inflationary expectations are we talking about?

Data compiled by the Federal Reserve Bank of St. Louis indicate that, as of June 10, the expected inflation rate over the next five years is just 2.23 percent. Interest rates on 30-year mortgages have fallen below three percent, compared with nearly five percent in 2018.

Given their performance over the past 13 years, it's not unreasonable to believe that the Federal Reserve officials who set monetary policy actually know what they're doing. When the pandemic hit, the economy was well into the longest peacetime expansion ever — and inflation was still subdued.

Fed Chairman Jerome Powell and his colleagues have earned the benefit of the doubt. They haven't forgotten the trauma of the 1970s, and they don't want to go down in history as the people who brought it back.

When prices jump, vigilance against inflation is entirely justified. But we should also watch out for false alarms.

Steve Chapman blogs at http://www.chicagotribune.com/news/opinion/chapman. Follow him on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

President Joe Biden

CNN Poll: GOP Efforts To Discredit Biden Are Failing

Reprinted with permission from American Independent

Republicans have been adamant that President Joe Biden's popularity will fall as they vilify his policy proposals, including the coronavirus relief package Congress passed in March and the infrastructure bill congressional Democrats are currently trying to pass.

Yet a new CNN poll released Wednesday found that their strategy has not worked, as Biden — and his policies — remain popular nearly 100 days into his tenure, despite the GOP's best efforts.

According to the CNN poll, 53 percent of Americans approve of the job Biden has done in his first 100 days in office. That approval rating tracks with Biden's approval rating average from FiveThirtyEight, which has hovered around 53 percent since he was sworn in on January 20 — a level he has maintained despite GOP criticism.

Other polls show that despite Republicans' attacks on his policies, both the coronavirus relief package and the infrastructure bill are even more popular than Biden is.

A CBS News/YouGov poll taken between April 21 to April 24 found 58 percent of adults in the United States approve of Biden's infrastructure plan, even though Republicans have been attacking it by saying it is not about infrastructure.

And that same poll found that 66 percent of adults believe the coronavirus relief package — which extended unemployment payments, authorized another round of direct checks, and made a child tax credit more generous to help alleviate childhood poverty — has been "helpful to the economy."

In all, that's a bad sign for Republicans like Sen. Lindsey Graham (R-SC), who toldPolitico that Biden's "policies are going to be our road to comeback."

Polls show the GOP's strategy of attacking Biden's infrastructure plan because it includes things they argue aren't infrastructure while simultaneously attempting to vilify it because it raises taxes on corporations and the rich is also rife with peril.

A Morning Consult poll from April found that voters believe things like care for the elderly, internet access, and water pipes are infrastructure, despite GOP claims that they aren't.

And voters support raising taxes on those groups. A Monmouth University pollfrom Monday found that 64 percent of Americans support raising taxes on corporations, while 65 percent support raising taxes on those earning more than $400,000 annually.

The fact that Republicans can't seem to make a dent in Biden's popularity appears to be pushing them toward a strategy of running against House Speaker Nancy Pelosi in the 2022 midterms.

Rep. Tom Emmer (R-MN), chair of the National Republican Congressional Committee that seeks to elect Republicans to the House, released a memo this week saying Pelosi is unpopular and that tying her to Democratic candidates could help in the quest to win back the House.

But it's unclear that will be the political winner that Republicans think it is.

Stu Rothenberg, a nonpartisan political handicapper, told the American Independent Foundation that, at this stage, he doubts running against Pelosi would be what changed GOP fortunes in the midterms.

"They've got Nancy Pelosi on the brain here, but the reality is that 2022 midterms is likely to be about Joe Biden," Rothenberg said, referring to Republicans. "And, I'd have to see some numbers that would really blow my mind to think that running against Nancy Pelosi would be more effective than running against Joe Biden."

Published with permission of The American Independent Foundation.

President Biden speaking in front of VP Harris, Sen. Majority Leader Chuck Schumer and House Speaker Nancy Pelosi.

Poll: Voters Credit Democrats, Not Republicans, On Rescue Plan

Reprinted with permission from American Independent

Since the passage of President Joe Biden's $1.9 trillion COVID relief package, Republicans have attempted to take credit for the legislation — despite the fact that not a single one voted for it.

Now, a new poll shows these efforts have overwhelmingly failed.

A poll this week by Invest in America shows that voters credit Biden and Democrats for the relief provided by the American Rescue Plan by a 49-point margin, with 48% of Republicans saying the same.

Other recent polls by Vox and Data for Progress show that 62 percent of voters were in favor of passing the expansive American Rescue Plan when contrasted with a smaller, more targeted relief proposed by GOP lawmakers — including nearly 50 percent of Republicans.

Sen. Roger Wicker (R-MS) made waves earlier this month when he proceeded to publicly take credit for a provision in the American Rescue Plan — relief for restaurant operators impacted by the pandemic — despite voting against the legislation.

He tweeted March 10, "Independent restaurant operators have won $28.6 billion worth of targeted relief. This funding will ensure small businesses can survive the pandemic by helping to adapt their operations and keep their employees on the payroll."

While Wicker, alongside Democratic Sen. Kyrsten Sinema of Arizona, did propose to amend the COVID relief plan with funding for restaurateurs, Wicker ultimately voted against the entire package.

Rep. Maria Salazar (R-FL) also came under fire for a misleading tweet on the matter.

"So proud to announce that the Biden Administration has just implemented my bipartisan COVID relief bill as part of @SBAgov policy!" she wrote on March 12.

While some interpreted her statement to mean that she was referring to the American Rescue Plan and taking credit for passing it, the deputy of the director of the National Economic Council explained on Twitter that the policy to which she was referring was a separate one introduced by Salazar in the House.

"I've seen some confusion on this. On Friday — separate from the American Rescue bill — SBA announced it was letting 3M+ businesses defer EIDL loan payments for an extra year," Bharat Ramamurti tweeted.

In recent months, Republicans have tried to praise themselves for passing COVID relief, despite months of stonewalling and refusing to grant Americans more assistance as they struggled through the pandemic, suggesting the blame was on Democrats, even as a Democratic bill passed by the House in May 2020 languished in the Senate, untouched.

It's not the first time Republicans have attempted to take credit for a stimulus package they didn't support. In 2009, 114 Republican lawmakers obstructed the passage of the American Recovery and Reinvestment Act, former President Barack Obama's stimulus package during the economic recession of 2008 — then bragged about its benefits to their constituents.

Rep. Rashida Tlaib (D-MI) was quick to call out Republicans' semantics on social media. "You know how in a group project there is always a handful of students who didn't contribute, but they still take credit at the end. That's the GOP after the passage of the American Rescue Plan," she tweeted on March 14.

Meanwhile, the American Rescue Plan has enjoyed such widespread popularity that many Republicans didn't even know their own party was not in support of it, or that zero GOP lawmakers had voted for it. One recent poll found that close to one-third of Republican likely voters — 31 percent — thought the bill enjoyed bipartisan support and that the GOP had backed it.

Write-in responses from the new Invest in America poll show that Republicans are, on the whole, pleased with the package and relieved to receive stimulus checks.

"It's allowing me to fix a place for myself and my children to live in forever," wrote one New York Republican.

"It made my life better," a Colorado Republican wrote separately.

But Democrats have warned of continuing attempts on the part of the right to hijack the legislation and claim it as their own.

Rep. John Yarmuth (D-KY) said on the House floor this month, "What we are all concerned about on our side is that the Republicans are all going to vote against this, and then they're going to show up at every ribbon cutting, and at every project funded out of this bill, and they're going to pump up their chests and take credit for all of these great benefits that are coming to their citizens."

Published with permission of The American Independent Foundation.

Trump Holdovers Blamed For Delay In Social Security Survival Checks

Trump Holdovers Blamed For Delay In Social Security Survival Checks

Reprinted with permission from Daily Kos

The Internal Revenue Service, which has some longstanding problems of its own, has another recent, urgent one: a backlog of survival checks meant for millions of disabled and retired Americans. They can't send out the $1,400 checks authorized by the American Rescue Plan President Joe Biden signed into law two weeks ago, on March 11. The reason they can't get those checks out to some of the millions who aren't regular tax filers is because they need the Social Security Administration (SSA) to send them the information to do it. And the hold-over Trumpers at the head of the SSA, commissioner Andrew Saul and deputy commissioner David Black, are likely the problem.

A handful of House Democratic committee chairs including Ways and Means Chair Richard Neal are on the case, demanding immediate action from SSA commissioner Saul to fix this. "We are aware that the IRS asked SSA to start sending payment files two weeks before the American Rescue Plan became law on March 11, 2021," wrote the chairmen. "As of today, SSA still has not provided the IRS with the payment files that are needed to issue EIPs to these struggling Americans. We demand that you immediately provide the IRS this information by tomorrow, March 25, 2021."

It's unclear if the AWOL Saul was actually at work to receive the letter. He has a storied history of not bothering to show up at work, just one of the problems the people who work at SSA have with him. Someone, however, got the message. According to an agency spokesperson, the letter was received, because they told HuffPost they'd get those files over to Treasury by Neal's deadline of Thursday. "Social Security staff is working day and night with Treasury and IRS representatives to ensure that the electronic file of Social Security and SSI recipients is complete, accurate, and ready to be used to issue payments," the spokesperson said.

Which is fine, but it will probably take another week for the IRS to get all the information sorted and checks out to the 30 million people who so far have been left out—those who don't normally have to file taxes. The IRS relies on SSA for the information of people who are disabled and retired and are non-filers. The SSA and IRS have already been through two rounds of this, so the procedure wasn't sprung on anybody. On top of that, the IRS gave SSA a two-week notice ahead of the bill being passed and signed essentially to say "get ready, we're going to need to be on this."

Social Security Works, a group that has been advocating for Social Security for years, was not amused. Executive director Alex Lawson slammed SSA's Saul and Black for the delay in an emailed statement, pointing out the real harm of the delay. "As a result, nearly 30 million seniors and people with disabilities—who are among those hit hardest by COVID—still haven't received their relief checks," he wrote. "They are counting on these checks for basic necessities like food and medication."

"Saul and Black were appointed by Donald Trump and have been acting as his agents for years," Lawson continued. "President Biden can't stand for this any longer. He must protect Social Security beneficiaries by firing Saul and Black immediately."

Saul and Black can both be fired by Biden. Since taking office in 2019, they have been working as doggedly to undermine the system as Postmaster General Louis DeJoy has at the U.S. Postal Service. Like DeJoy, they're longtime Republican operatives and big donors. Like DeJoy, destroying beloved institutions seems to be their jam, and making life particularly hard for the most vulnerable among us their goal. The two have not only run roughshod over staff at the SSA, but they have politicized the Social Security disability program, trying to make benefits harder to get and more burdensome to keep by creating all sorts of hoops for disabled people to jump through.

Democrats, including Senate chair of the Subcommittee on Social Security, Pensions, and Family Policy Sherrod Brown and the members who called out the SSA for delaying checks, have been demanding that President Biden immediately fire and replace the two. They are "incapable of carrying out Democrats' vision of protecting and expanding Social Security," Brown said in his first statement as committee chair. "As agents of the Trump Social Security agenda, they cut the benefits that hardworking Americans have earned, attacked the Social Security Administration's employees, denied beneficiaries due process, and needlessly increased disability reviews during the Covid-19 pandemic," said Brown.

Add unnecessarily delaying critical financial help to 30 million of the most vulnerable Americans to the list. These guys have got to go.