How Biden Plans To Bring Down Inflation – Forbes Advisor

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Inflation is still running hot despite a slight slowdown in the April Consumer Price Index (CPI) report. Everyday items, from gas to groceries, are becoming unaffordable for many Americans. The cost of gas is about $ 4.40 per gallon nationwide. At the grocery store, some shoppers are forced to choose between getting the nutrients they need and not going broke.

Nearly all Americans are feeling some pain: According to a recent CNN poll, 80% of Americans say the government isn’t doing enough to combat inflation.

On May 10, Biden detailed his plan to curb inflation. But exactly how soon Americans will feel relief from that plan — and what Congress will rubber-stamp — remains unknown.

What’s in Biden’s Plan to Tame Inflation?

With fast-approaching midterm elections threatening Democrats’ slender congressional majority, Biden is under pressure to tame inflation and restore public trust.

“I want every American to know that I am taking inflation very seriously and it’s my top domestic priority,” Biden said during remarks on Tuesday.

His plan would work in tandem with the Federal Reserve, which recently raised its target rate by 0.5%, the largest rate increase in more than 20 years. The Fed projects that a series of hikes in 2022 will help cool inflation.

Biden’s plan to curb inflation includes:

  • Releasing oil from the strategic reserves. Biden has already started releasing an additional 1 million barrels of oil per day from the nation’s strategic oil reserve, and the initiative will continue for the next six months. The administration is also allowing E15 gasoline, a cheaper type of gas, to be sold during the summer in an effort to increase the oil supply and push down prices at the pump.
  • Clean energy and vehicle tax credits. Biden says creating more clean energy and transportation options would save families an estimated $ 500 per year on utility bills.
  • Lower health care costs. Health care costs are some of the biggest expenses for Americans. Biden proposes to lower prescription and health care premium costs, cap insulin costs and allow medicare to negotiate drug prices. His plan of him would also penalize drug companies that raise prices faster than inflation.
  • Provide resources to help American farms increase food production. Biden also wants to enable competition in the meat and poultry processing sector, which he says is dominated by four big companies — Cargill, Tyson Foods, JBS, and National Beef Packing — that are “exploiting” inflation by raising prices further.
  • Address supply chain issues. Biden aims to reduce supply chain bottlenecks by hiring more truckers and working with businesses and state governments to reduce backups at ports. He also wants Congress to pass the Bipartisan Innovation Actwhich would create a supply chain office at the Department of Commerce to help solve supply chain bottlenecks through investment and adaptation of new technologies.
  • Lower the cost of child care and long-term care. Biden is calling on Congress to invest millions of dollars into the child and long-term care industry. According to a fact sheet for Biden’s inflation plan, the investment would save families “thousands of dollars per year” but doesn’t say how. Biden says that by making child care more affordable, more parents with care responsibilities will be able to enter the workforce and help push prices down over time.
  • Build more than 1 million affordable homes. Biden also wants Congress to help build more than 1 million affordable homes by using existing federal funding, passing new tax credits and increasing federal financing for construction.

Will Biden’s Plan to Curtail Inflation Work?

Though Biden outlined his plan to reduce inflation, much of it relies on getting new laws passed by Congress. And some of the initiatives have already faced gridlock.

Lowering child care costs, for example, was part of Biden’s Build Back Better plan last year. The plan would have invested millions to make preschool free for 3- and 4-year-olds and create an affordable child care program that would cap costs for families whose income was under a certain threshold. But lawmakers couldn’t agree on the overall price tag of the bill, leaving it on the cutting room floor.

These initiatives will also compete with other urgent funding requests.

After announcing there could be as many as 100 million Covid-19 cases in the fallthe White House called on Congress to pass more funding for vaccines and treatment — something Congress is still at odds over.

According to PunchBowl News, Democrats are asking for around $ 20 billion in funding, in line with what the White House has requested, whereas Republicans are considering a pared-down $ 10 billion package.

While Biden’s plans to manage inflation are ambitious and wide-ranging, they will take time to implement — which could fail to satisfy an American public that wants to see change now. When asked by a reporter when Americans can start seeing prices come down, Biden didn’t offer a solid answer.

“I don’t know, but I know what we have to do to make sure that we can bring it down,” Biden said.

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