Concerns about inflation have moved form Wall Street to Main Street. U.S. consumer prices increased by the most in 13 years in June, and Americans are noticing.
One poll from conservative group American Action Network found 86% of survey respondents are at least somewhat worried about inflation. Another poll – from Harvard CAPS/Harris last month – found similar results. A third poll that came out last week found 75% of registered voters have recently seen or read “a lot” or “some” about the issue.
The concerns are providing an opening for Republicans who oppose Democratic spending efforts, particularly the $3.5 trillion reconciliation bill. One of President Biden’s former pollsters recently warned that Democrats need to confront the issue more forcefully.
Rep. Kevin Brady (R., Texas), the ranking Republican on the House Ways and Means committee, cited the new polls in a Yahoo Finance interview this week. Consumers “see this massive government spending as part of that problem," said Brady. “The policies of the president are driving some of these troubling issues.”
Economists say a range of factors are contributing to inflationary pressures, including supply constraints and worker shortages combined with increasing demand compared to low levels seen during the pandemic. And much of this is out of the Biden administration’s control.
Brian Deese, Biden’s top economic advisor, said in an interview this week that he still felt inflation pressures would soon ease but also acknowledged that consumer sentiment was a challenge for Democrats.
“We recognize that when consumers see price increases, they notice,” Deese said. “We think that the data certainly indicates that much of what's going on here is these temporary factors that we anticipate will not persist.”
‘Lower costs for working families’
But with Treasury Secretary Janet Yellen recently predicting “several more months of rapid inflation” before things will settle down, Democrats are hoping to argue that not only will inflation be short-lived, but that enacting Biden’s policies will help.
And White House senior adviser Anita Dunn is reportedly set to meet with Democratic senators on July 22 to plan messaging strategy. Part of the case going forward appears likely to be that the $3.5 trillion reconciliation bill will bring jobs, tax cuts and “lower costs for working families.”
A recent analysis from Moody’s Analytics predicted that passing the next two big items in Biden’s agenda – a bipartisan infrastructure bill on top of a Democrats-only reconciliation package – would boost the U.S. economy without sparking higher inflation.
During his town hall, Biden cited the Moody’s analysis in support of his agenda, saying his legislation would end up “driving down prices, not raising prices.”
Unclear yet if the public blames Biden for inflation
On the question of whether the public is yet pointing fingers at the Biden administration or Washington for climbing prices, the numbers are a bit mixed. The recent Harvard CAPS/Harris poll found majorities – 58% and 55% – trust the Federal Reserve and Biden administration, respectively, to curb inflation.
The American Action Network survey asked respondents whether they were worried about “Democrat spending proposals that could cause inflation.” Three-quarters of respondents said they were extremely or somewhat worried.
Democratic pollsters recently told Axios they believe voters still mostly blame inflation on pandemic-related supply chain problems as opposed to Biden’s policies.
Rep. Brady said that could change. “If Americans see another $3.5 trillion of spending go out the door," he said, "there's no question it's going to reinforce their belief that inflation will be much longer than the White House hopes it will be.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.