Democrats get the memo

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Sen. Joe Manchin, D-W.V., has groused about inflation since last year. 

After months of browbeating Manchin for not supporting the Democrats’ social spending package, other Democrats are now finally joining Manchin with their own inflationary concerns. 

“We have solutions and we’re going to focus like a laser on reducing costs,” said Senate Majority Leader Chuck Schumer, D-N.Y. “You’re going to see a lot of activity in March from us on that issue.” 

In March. 

Scroll back the calendar to December. Or October. Or even last July. 

Manchin warned Democratic leaders he was reluctant to support Build Back Better because of the cost. The size of the bill dwindled from more than $5 trillion to $1.7 trillion. But such a plump infusion of cash into the economy from COVID relief bills may have driven up inflation to its highest crest in decades. There are some analysts who believe consumers haven’t seen the worst of inflation because prices haven’t completely caught up to where things stand in the supply chain. 

Although Democrats were impassioned about passing Build Back Better last fall, their political antennae are now acutely tuned to inflation. A University of Michigan index traced how consumer confidence plunged over the past year in tandem with inflation jumping to a 40-year high. This comes as the Consumer Price Index (CPI), which tracks the average “basket” of goods people buy on a regular basis skyrocketed 7.5 percent in 2021, the biggest leap in four decades. 

President Biden failed to convince Sens. Joe Manchin and Kyrsten Sinema to eliminate or weaken the filibuster.
(AP/Getty Images)

Obviously Democrats want to run on the best economy possible as the midterms creep closer. But how much of this pivot to inflation is about tailoring a message compared to actually addressing the subject?

After Manchin formally ditched his support for Build Back Better during an interview with colleague Bret Baier just before Christmas, Schumer threatened to hold a vote anyway on the bill in the new year. Perhaps this was a promise to an apoplectic left which believed Manchin was rolling Schumer. But that promise proved to be a hollow one. There’s been no vote on Build Back Better. So one wonders the legislative fate of incipient Democratic proposals to curb inflation. Or, if those nascent proposals would even sufficiently address inflation. 

That said, Democrats could cloak some pieces of Build Back Better as measures to tackle inflation. 

“Whether it’s child care. Or prescription drugs. Or semiconductor chips. Or filling up at the gas pump. What’s on the dining table. The cost of food,” mused Schumer. “We’re coming up with solutions to address these issues.” 

Of course, Congress really doesn’t have much control over inflation. But Congress may have overheated the economy with $5.8 trillion in coronavirus relief since the beginning of the pandemic. Many Republicans were on board for most of that spending. However, the GOP flags Democrats for muscling through their own $1.9 trillion COVID package last winter. That could be the true inflationary culprit. 

Who is actually responsible for controlling the levers on inflation? The Federal Reserve has the most control over inflation, particularly when it comes to control of interest rates. In fact, minutes released from the January meeting of the Fed shows that it’s concerned enough about inflation to signal an interest rate hike could come in March. Tightening monetary policy could dampen inflationary pressures. 

President Joe Biden speaks during a news conference in the East Room of the White House in Washington, Wednesday, Jan. 19, 2022. Biden ends his first year in the White House with a clear majority of Americans for the first time disapproving of his handling of the presidency in the face of an unrelenting pandemic and roaring inflation. That’s according to a new poll from The Associated Press-NORC Center for Public Affairs Research. (AP Photo/Susan Walsh)
(AP Photo/Susan Walsh)

Suddenly, the Federal Reserve is the best friend of Democrats, regardless of a possible interest rate spike. That’s why Democrats are apoplectic that Republicans are blocking the confirmation of President Biden’s nominees to the Federal Reserve. This includes the reconfirmation of Fed Chair Jerome Powell – who some liberals oppose. And, the nomination of a progressive favorite vice chair nominee Lael Brainard. 

Republicans are taking particular aim at Sarah Bloom Raskin, Mr. Biden’s pick to serve as the Fed’s top banking regulator. But Raskin faces GOP fire after advocating the Fed be more involved in regulating climate change. Raskin tried to stamp out those suggestions during her confirmation hearing. She said the Federal Reserve shouldn’t pick winners and losers when it comes to the environment. 

Raskin is the wife of Rep. Jamie Raskin, D-Md. He managed the Senate impeachment trial of former President Trump last year. 

Republicans boycotted a meeting this week of the Senate Banking Committee. That robbed the panel of a quorum and hamstrung Democrats from propelling the nominees to the floor for a confirmation vote. So the nominees are now bottled up in committee. 

“There are highly controversial nominees, extremely controversial, who’ve repeatedly expressed the view that the Fed should be involved in things that are not the Fed’s responsibility. The best way for this to stop is for the President to stop sending up these kinds of nominees,” said Senate Minority Leader Mitch McConnell, R-Ky. “There’s a lot of skepticism that many of these nominees are not up to the job.” 

Democrats immediately went on the attack. 

Sen. Elizabeth Warren, D-Mass., opposed the re-nomination of Powell and preferred Brainard for the top Fed gig. Warren said she “lost that argument” when President Biden re-upped Powell. 

“The President extended an olive branch to all of the Republicans in this chamber who urged the Democratic President to let Republican Powell stay on. And what has been the Republican response to that olive branch? They’re lighting that branch on fire,” said Warren. 

Sen. Elizabeth Warren (D-Mass.)
((Photo by Scott Olson/Getty Images))

Liberals say after the Powell nomination, the GOP should accept their nominees. 

And note that the Senate confirmed Raskin to the Federal Reserve for an earlier stint in 2010. There was no opposition to her nomination. 

But Democrats were quick to pirouette on the GOP opposition to the nominees and link to inflation. Public opinion polls are smearing President Biden and Democrats over the economy. Democrats know that turning the Federal Reserve nominees into a cause celebre may help their cause. 

“On the floor every day, Republicans get up and talk about inflation,” said Sen. Jon Tester, D-Mont. “But what group is out there to deal with market forces any better than the Fed? There is (none). And (Republicans) don’t show up to vote.” 

It’s tenuous to suspect the Republican blockade over Fed nominees will resonate with voters. But Democrats are more than happy to incorporate the confirmation traffic jam into their narrative about inflation heading into the midterms. 

Democrats may have found themselves in a better position on the economy had they recalibrated their focus to inflation months ago. They instead upbraided Manchin for opposing more federal spending last year. 

Manchin’s decision to incinerate Build Back Better outraged the left. That’s the base of the Democratic party. But even if Democrats pass Build Back Better, they managed to curate the precise narrative which they don’t need: they’re for big spending and asleep at the switch on inflation – just before the midterms.

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