Inflation pain allegedly caused by Biden’s spending demands transparency, Republican says

Rep. Jim Banks is proposing a change to House rules requiring committees to report how legislation will affect inflation to highlight the recent price increases many Republicans attribute to President Biden's policies. 

The proposal, first reported by the Washington Examiner, would mandate that House committees produce "a detailed analytical statement" on any spending bills about whether they "may have an inflationary impact on prices and costs in the operation of the national economy."

The proposed rule change would include how that inflation would "affect the purchasing power of low and middle-income families."

The change is highly unlikely to pass in the Democrat-controlled House of Representatives. But in the wake of a Labor Department report Thursday showing the consumer price index rose 5% in May year over year, Republicans like Banks, R-Ind., are aiming to blame the president for the decrease in the average American's purchasing power. 

CONSUMER PRICES SURGE 5% ANNUALLY, MOST SINCE AUGUST 2008

"When people think about how government policies may affect their personal finances, they think of taxes—or, how much the government takes out of your paycheck," Banks said in a statement. "We want them to think of inflation, too, because government policies affect how far your paycheck will go."

One of the ways Republicans say the president is contributing to inflation is his massive coronavirus stimulus bill passed earlier this year, which the GOP said was unnecessary spending as the economy was already recovering. 

They also say the president's insistence on keeping boosted federal unemployment benefits in place is pumping too much money into the economy and discouraging workers from seeking employment – creating an artificial labor shortage. 

"The chairman of Obama’s Council of Economic Advisors blasted Biden’s spending spree: ‘I don’t know any economist that was recommending something the size of what was done,’" the Republican Study Committee, which Banks chairs, tweeted late last month. "Biden ignored his own party’s economists. Now we pay the price via inflation."

"Inflation is Biden’s hidden tax on working families! Democrat big spending policies negatively affect everyone," Banks himself also tweeted. 

The rising prices are caused by many factors. With the economy heating up in the wake of the pandemic, rapidly increasing demand for goods and services outpaced a corresponding increase in supply, leading to higher prices.  

Some price increases can also be attributed to unavoidable supply chain bottlenecks as parts of the economy regain their equilibrium after being essentially shut down for a year or more. 

But Alex Pollock, a distinguished senior fellow for finance, insurance and trade at the libertarian R Street Institute, told FOX Business that despite the other factors, he "certainly" thinks the president's policies are playing a large role in the current inflation. 

WHAT IS INFLATION? WHAT TO KNOW ABOUT THE ECONOMY AS PRICES RISE

Pollock said the biggest contributor is massive government spending that's financed by monetizing the debt. And the inflation, Pollock emphasized, is reducing Americans' "real wages" and cutting the value of their savings. 

White House Press Secretary Jen Psaki disagrees. She said last month that the White House takes the threat of inflation "very seriously" but that it is likely "temporary" and "reflects the reality of an economy that’s rapidly turning back on because of a successful economic strategy."

Sameera Fazili, the deputy director of the National Economic Council, also dismissed concerns about inflation in a press briefing this week. 

"[O]n these supply chain bottlenecks that we’re seeing, these — some of these — these price dislocations, these temporary increases in delivery time — we fully expect these bottlenecks to be temporary in nature and to resolve themselves over the next few weeks," Fazili said. 

"Demand came back much quicker than even companies expected. I think the success of our vaccination campaign surprised many people, and so they weren’t prepared for demand to rebound in this way.  But we still expect this to be transitory in nature," she added. "We’re going to keep an eye on it, but we think it should resolve in the next few months."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

According to Banks' office, the new proposed rule has 25 co-sponsors including House GOP Conference Chair Elise Stefanik, R-N.Y., National Republican Congressional Committee Chair Rep. Tom Emmer, R-Minn., and more. 

FOX Business' Jonathan Garber contributed to this report.