7 Ways President Biden Plans to Fight Inflation
During President Joe Biden’s first State of the Union address on Tuesday night, he covered a wide range of issues, from Ukraine to the economy. One major issue: tackling the highest rate of inflation America has seen in 40 years.
“… too many families are struggling to keep up with the bills. Inflation is robbing them of the gains they might otherwise feel,” he said. “I get it. That’s why my top priority is getting prices under control.”
Here are the plans the president laid out to fight inflation, many of which were featured in his Build Back Better plan that stalled out in Congress last year.
1. Making more products in America
Anyone who’s been to the grocery store in recent months has likely noticed both higher prices and missing products. These trends are partially due to ongoing supply chain issues, which Biden hopes to resolve by making more of what we need here in the U.S.
“… instead of relying on foreign supply chains, let’s make it in America,” Biden said.
While he was speaking about consumer goods like cars, at another point in the speech he made it clear he’s talking about infrastructure, too.
“We will buy American to make sure everything from the deck of an aircraft carrier to the steel on highway guardrails are made in America,” Biden said.
2. Lowering drug prices
Biden wants to cut the cost of prescription drugs, and specifically cited insulin as an example.
“Insulin costs about $10 a vial to make,” he said. “But drug companies charge families like Joshua and his dad up to 30 times more. I spoke with Joshua’s mom. Imagine what it’s like to look at your child who needs insulin and have no idea how you’re going to pay for it.”
Biden wants the cost of insulin capped at $35 a month, and for the federal government’s Medicare health insurance program to negotiate lower prices on prescription drugs like the U.S. Department of Veterans Affairs does.
3. Making child care more affordable
“Many families pay up to $14,000 a year for child care per child,” Biden said. “Middle-class and working families shouldn’t have to pay more than 7% of their income for care of young children.”
The president explained his plan would cover pre-K and cut the cost of child care in half for most families, without raising taxes on anyone making less than $400,000 a year.
4. Taxing big business and the very wealthy
“Just last year, 55 Fortune 500 corporations earned $40 billion in profits and paid zero dollars in federal income tax,” Biden said.
He called for a 15% minimum tax on corporations and closing loopholes so “the very wealthy don’t pay a lower tax rate than a teacher or a firefighter.”
Biden said this is part of his and Vice President Kamala Harris’s efforts to “build the economy from the bottom up and the middle out, not from the top down.”
“For the past 40 years we were told that if we gave tax breaks to those at the very top, the benefits would trickle down to everyone else. But that trickle-down theory led to weaker economic growth, lower wages, bigger deficits, and the widest gap between those at the top and everyone else in nearly a century.”
5. Creating more competition
“I’m a capitalist, but capitalism without competition isn’t capitalism,” Biden said. “It’s exploitation — and it drives up prices.”
In particular, Biden pointed to foreign shipping companies he said raised prices as much as 1,000% during the COVID-19 pandemic, and announced plans to crack down on them for overcharging.
6. Helping workers find better jobs and higher pay
Biden promoted the American Rescue Plan Act that he signed into law last year as a job creator, noting that the U.S. created 6.5 million new jobs in 2021. He said that was “more jobs created in one year than ever before in the history of America,” but he wants more.
Biden asked Congress to pass already proposed legislation that would raise the federal minimum wage to $15 an hour, offer more paid leave and help workers unionize.
He also mentioned programs to “provide more training and apprenticeships” so workers could be hired “based on their skills, not degrees.”
7. Filling out the Federal Reserve board
Biden also demanded Congress finish the task of confirming his nominees to the Federal Reserve, “which plays a critical role in fighting inflation” in part by managing interest rates.
Four of Biden’s nominees to the Federal Reserve, as well as the re-nomination of the current chair of the board, have been held up by Republicans in the Senate over concerns about regulation, The New York Times reported today.