Supporting more social and infrastructure packages, the Democratic Party is paying the price for the trillions of dollars spent on tax breaks.
On Feb. 10, the annual inflation rate data released by the U.S. Bureau of Labor Statistics was surprising. In January, beyond all expectations, it grew 7.5%, the highest figure since February 1982. The increase was mainly caused by items such as food and energy, which rose 0.9% in January. A direct part of consumer life, the rise in the cost of living that has been eroding Americans’ incomes in recent months is affecting the popularity of President Joe Biden.
According to the Economist/YouGov poll conducted between last Saturday and Tuesday, 40% of the 1,500 adult U.S. citizens surveyed have a “very unfavorable” opinion of Biden. The poll shows that the rejection of the American president has been increasing; in August 2021, 35% gave him a “very unfavorable” rating, while 28% were “very favorable.” The same occurred with Speaker of the United States House of Representatives Nancy Pelosi, of whom opinions labeled as “very unfavorable” rose from 38% to 41% in the period, while “very favorable” opinions fell from 22% to 17%.
Simultaneously, when asked, “What is the most important problem facing the United States today: unemployment or inflation?” the “inflation” answers rose from 29% to 48%, while employment dropped from 18% to 8%. The poll reflects Americans’ dissatisfaction with the Biden administration’s fiscal policy, which still advocates increased public spending through an infrastructure package and the Build Back Better bill. In the past year, the discussion about the extent to which stimulus policy was responsible for the rise in prices had gained ground among intellectuals, but now it has reached the White House.
The U.S. midterm elections, to be held in November, are at stake. Losing the House majority will be easy for the Democrats, as Republicans only need to gain control of five more seats. In the Senate, split between 50 senators for each side, Democrats are even more vulnerable, given that only one seat would be enough to lose the majority.
With an eye on the elections, Senate Minority Leader Mitch McConnell credited the rise in prices to the packages defended by the Democrats — among them the $1.9 trillion bill approved in March 2021, without the support of the Republicans.
Pressure on the Fed
Following the release of the January inflation data, pressure on Federal Reserve Chairman Jerome Powell has increased. James Bullard, a Fed member and a voter in decisions regarding monetary policy, said he wanted a 1-percentage-point interest rate hike through July.