Biden vows to battle inflation as costs preserve climbing

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According to President Joe Biden, the US is in a strong position to overcome the worst inflation in more than 40 years. But so far, inflation is overwhelming the US economy and the Biden administration.

The President’s policies, his dealings with the private sector, regulatory measures and public banter have so far failed to stop prices from rallying.

Biden vowed on Friday to keep fighting inflation while touring the Port of Los Angeles, America’s busiest port and a place the White House said last October would be key to alleviating price pressures.

“My administration will continue to do whatever it takes to bring prices down for the American people,” the president said after a decidedly grim new consumer price report.

The Labor Department reported on Friday that consumer prices rose 8.6 percent in May from a year earlier. It’s the worst reading since December 1981 and a worrying sign for the economy as Federal Reserve rate hikes have yet to dampen inflation as gas costs soar. Rising prices are jeopardizing the US economy and Democratic control of the House and Senate, putting Biden on the defensive.

AAA separately reported that average US gas prices hit a record $4.99 a gallon, a surge that has overwhelmed the president’s earlier efforts to bring headline inflation down. The pain at the pump hurts Biden’s public support ahead of the midterms.

The president also blamed inflation on corporate earnings on Friday, saying some companies — including shipping companies and the oil industry — are focused on maximizing profits. Biden specifically targeted ExxonMobil for not doing more to increase oil production.

“Exxon made more money than God this year,” he said.

ExxonMobil responded to Biden’s comment by saying it was producing more oil.

“We have been in regular contact with management updating them on our planned investments to increase production and expand refining capacity in the United States,” Casey Norton, a company spokesman, said in an email. “We increased production in the Permian Basin by 70 percent or 190,000 barrels per day between 2019 and 2021. We expect to increase production from the Permian by an additional 25 percent this year.”

The Port of Los Angeles was opened last October as part of a deal that had the White House helping start 24-hour operations. The goal was to clear backlogs from ships waiting to dock and containers waiting to flow into the country, a deadlock that sent prices skyrocketing as the world swam away from the coronavirus pandemic began to recover.

The port is now moving a record 200,000 containers on a 30-day moving average. But the forces driving inflation have largely shifted to rising energy and food costs in the wake of Russia’s invasion of Ukraine. There was also a broader price spike that transcends supply chain issues. Spending on accommodation, airline tickets and medical care increased significantly in May.

Port of Los Angeles executive director Gene Seroka said there are many levers leading to improved performance to get goods to consumers and businesses faster. But he specifically credited the federal government’s “convening powers to bring people around the table” and the Biden administration’s focus on the supply chain.

“We have reduced the number of ships waiting to enter port by 75 percent this year,” Seroka said. “These guys are really working because we still have strong consumer demand.”

The Biden administration is seeking to lower shipping prices further with a bipartisan bill that the House of Representatives could pass as early as next week. The bill would give the Federal Maritime Commission tools to make seaborne trade more efficient and price competitive, and improve the flow of exports and imports.

“What I found here in California is that they want us to do whatever we can to address the inflation problem — and that’s clearly a significant part of the problem,” said Rep. John Garamendi, D-Calif ., a sponsor of the bill.

Rep. Dusty Johnson, RS.D., said he sees a need for the extra tools in part after a cheese processor in his state suffered two million pounds of lactose rot because no shippers would take the product even though 60 percent of shipping containers returned empty to Asia.

“This is not a magic bullet in terms of inflation,” said Johnson, who sponsored the law. But he noted that if the provisions are implemented, “it will absolutely have an impact on inflation.”

Strong consumer demand has been a double-edged blessing for Biden. It reflects the robust job growth and solid fiscal balance sheets that followed the $1.9 trillion coronavirus relief package passed last year. But demand has consistently outstripped supply, causing prices to rise to levels that are forcing the Federal Reserve to try to slow growth and potentially risk a recession.

The White House claims the US can fight inflation without stumbling into a downturn because the economy, with an unemployment rate of 3.6 percent, is strong enough to withstand a slowdown.

Biden is also trying to portray inflation as a global challenge, sparked first by the pandemic and then by Russia’s invasion of Ukraine. The President is trying to deflect Republican lawmakers’ criticism that inflation is the result of his overly generous state aid and overly onerous restrictions on US oil production.

Biden has sought to slow inflation by improving port operations and twice releasing oil from the U.S. Strategic Reserve, in addition to other regulatory initiatives and a domestic policy agenda that includes budget deficit reduction that would require congressional approval.

The visit to the port comes as Biden hosted the Summit of the Americas in Los Angeles. On Friday he will also deliver a statement on migration and hold a working lunch with the leaders attending the Conference for Nations of the Western Hemisphere.

And given the campaign season, Biden will attend two fundraisers for the Democratic National Committee on Friday.

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