The House passed the Build Back Better social infrastructure package on Friday. The big question, of course, is whether Senators Joe Manchin and Kyrsten Sinema will strip it to the bone or even allow it to advance through the Senate at all—especially with the bipartisan infrastructure bill no longer being held back as leverage against the recalcitrant lawmakers.
The biggest conversation in Washington, however, isn’t about social or physical infrastructure. Instead, the political universe is in a tizzy over inflation. This is unsurprising: Core inflation is higher than it has been in decades. Gas prices are on the rise for largely unrelated reasons due to the country slowly coming out of the pandemic. Simply put, these are developments outside of politicians’ control, but voters still feel the damage when they see the numbers on giant placards everywhere they go. And, of course, there is an entire conservative media complex eager to stir up discontent over the situation.
It’s in conservatives’ interest to argue that inflation is caused by too much stimulus and government spending. They hate the prospect of higher taxes on the rich, and they love to keep the labor pool desperate enough to accept cruelly low wages. But there is little reason to believe that social spending is the culprit. The current inflation spike is almost entirely due to issues related to the supply chain and the ongoing pandemic.
If policy makers can help to resolve both crises, inflation will ease. Democrats have an added incentive to do this: History has shown that voters tend to punish the party in power when prices skyrocket.
But core inflation is not the biggest driver of higher expenses for consumers. By far the biggest pinches to Americans’ wallets have come from the rising costs of health care, child care, education, and, especially, housing. Fortunately, a robust Build Back Better bill would work to lower costs on all of those fronts.
In fact, the surge in prices for basic goods and needs is so staggering, it’s a wonder the American political system has remained as stable as it has. Average family health care premiums have jumped by more than 47 percent in the past decade alone. Average child care costs have risen so quickly that they now comprise 36 percent of household income for U.S. families with young children. The cost of college education has soared eight times faster than wages in the past three decades, raising student debt to alarming proportions. Anyone who has looked at Zillow or rental prices lately can see that the housing market is beyond broken for anyone not lucky enough to be an investor or sitting on property purchased when prices were remotely reasonable. What’s more, climate change threatens to make everyone’s lives much more dangerous and expensive in ways large and small
Various provisions in the Build Back Better Act are designed to address these problems precisely, in one way or another—especially the cost of child care and prescription drugs. The landmark legislation helps to create more than 1 million more affordable homes; extends tax cuts for families with children; reduces prescription drug prices; makes college more affordable; invests in green energy; and much more. These measures will all lead to cost reductions for American families.
Crucially, it will do so without even a hint of impacting “core” inflation. Government spending isn’t the cause of increased core inflation anyway, but Build Back Better is entirely (or almost entirely, depending on how you score it) paid for by tax increases on the wealthy. Higher taxes, of course, are one of the key mechanisms the government has to put a speed bump on inflationary pressure. The Biden administration, for its part, has notably been touting a letter signed by 15 Nobel Prize winners in economics, asserting that the bill will decrease rather than increase inflation
Fortunately, the conversation over inflation didn’t derail the passage of the Build Back Better Act in the House. Even moderate House Democrats seemed to understand the necessity of passing the social spending bill’s provisions—and aren’t being scared off by bad-faith conservative attacks.
But the Senate will be harder going. It will be crucial to continue reminding Manchin, Sinema, and any other senators wary of misleading and mendacious GOP talking points on inflation that the best way to help reduce the large rising cost burdens on their constituents is to pass a robust version of the Build Back Better Act.