Crapo: Inflation is Hurting Americans and Eroding Wages

Hearing

At a U.S. Senate Finance Committee hearing with U.S. Department of the Treasury Secretary Janet Yellen, Senator Mike Crapo (R-Idaho), the top Republican of the Committee, highlighted how inflation is hurting American families, and pressed Secretary Yellen on economic policies that could potentially worsen the inflation crisis.

On inflation:

"Inflation is hurting American families and eroding wages. People are adjusting spending, even on basic necessities, to make ends meet. They are being hammered at the gas pump and in the grocery aisles and across the economy. As wages rise to keep up with inflation, odds of an inflationary wage-price spiral rise.

"Inflation became broad-based and accelerated last year following the untargeted American Rescue Plan Act. That Act poured $1.9 trillion of inflation fuel into an economy with growing supply-chain disruptions and households with elevated disposable incomes and liquid savings.

"Following that, Democrats pushed for trillions more in reckless spending. The result, which many predicted, has been inflation at highs not seen in 40 years. As prospects of recession and stagflation rise, this is no time to consider raising taxes or resurrecting reckless spending proposals from the House-passed Build Back Better bill."

On whether raising taxes or engaging in stimulus spending is sound fiscal policy:

"Secretary Yellen, you heard from me in my opening statement about the significant pain that Americans are suffering from because of inflation that accelerated and became broad based following enactment of the American Rescue Plan last year. Democrats are claiming that Republicans are trying to raise taxes. Nothing could be further from the truth. The reality is that as we speak, the Democrats are trying to negotiate a new massive plan that would raise taxes significantly. Do you believe that it would be prudent fiscal policy to increase taxes or engage in more stimulus spending with an economy facing the prospects of stagflation?

. . .

"What I heard you say is that it is okay to raise taxes right now and it is proper to have more stimulus spending to deal with this crisis, and I just have to say that I disagree with you on that."

On the Administration's anti-energy policies contributing to high gas prices:

"Do you continue to believe that the President's policies with regards to reducing our capacities to develop our own oil and gas reserves and potential is the appropriate approach to this? You mentioned taking from our strategic petroleum reserve which I think weakens us, but you didn't mention increasing our domestic production of energy.

. . .

"The permits for proceeding on leases are not being facilitated. The President issued an executive order to shut down the Keystone XL pipeline, to stop the issuance of more leases. They've stopped progress on the permitting of more leases, stopped offshore oil production. The fact is, we were energy independent and now we are not. And it's not the result of a failure of capacity."

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