During the press conference on July 15, Biden’s press secretary, Karine Jean-Pierre, made a ridiculous claim about the Democrat reconciliation bill.
This bill would include enormous amounts of spending, and Senator Manchin opposes it because he believes it will increase inflation. Jean-Pierre claimed that by increasing government spending, inflation will be reduced.
The comment was a result of a reporter asking about the two spending bills currently in the legislature.
“Regarding that, Karine, you have two significant legislative initiatives that you promote as, you know, assisting with inflation — reconciliation obviously, followed by the China bill and the USICA bill. Both have a clear connection and appear to be stagnating at the moment.
Is it worthwhile to give up reconciliation if you can pass USICA more quickly given how much it has been weakened, assuming Manchin gets what he wants? You guys keep citing the importance of USICA for national security.”
Manchin wants to cut back on spending, which would appear to be a smart strategy to start lowering inflation as it would entail using fewer newly produced dollars and flooding the economy with even more cash.
Jean-Pierre disagreed with Manchin’s position, saying that spending the whole amount that Democrats are asking for in the reconciliation measure will in some way contribute to lowering inflation.
The main argument made by Democrats is that the reconciliation measure, which would raise taxes on a small number of wealthy earners, is anti-inflationary since it would utilize those money to somehow cut expenditures.
Democrats’ assertion that measures would be funded by higher taxes and reduced prices may come true, in which case their argument may be valid. Republicans and Manchin, though, remain unpersuaded, arguing that the package will just increase government spending rather than bring down costs.