CNBC on-air editor Rick Santelli said Tuesday that the passage of the White House’s recent spending packages worsened inflation.
Santelli blamed ongoing government spending for the latest Consumer Price Index (CPI) numbers. Inflation slightly dropped to 8.3% in August from 8.5% in July, though core prices slightly jumped to 6.3%. Santelli said government spending has been a main contributor to inflation. Yet the government has poured out more money through the CHIPS Act and President Joe Biden’s student loan forgiveness plan.
“The thing that really bothers me with regard to inflation is everybody here on this panel agreed months ago that one of the reasons inflation was high was all the government spending. And after we agreed on that, what did the government do? They spent more! Student loans, welfare in terms of the CHIPS Act, it seems like nothing is sinking in. These numbers aren’t better than expected and maybe they should be. Maybe, ultimately, they’re gonna start to go back up again because we continue to go back to that well of debt and spending.”
Santelli said core prices reached their highest levels in March of this year since 1982. He pointed to the price of food standing at double the expected amount, which currently rose to its largest 12 months increase in 43 years. (RELATED: Martha MacCallum Spars With Biden Economic Adviser Over Inflation, Student Loans)
“It’s also hotter than expected. Up 6.3%, we’re expecting up 5.9%. The high watermark there, up 6.5%, that was in March,” he said. “That was the highest since ’82. So when we see 6.3%, that actually now is the highest since March, since it was the highest in ’82. We’ve had four months in a row where it was moderating a bit, we’ll call an end to that.”
Economists have raised concerns about Biden’s student loan forgiveness plan, which provides $10,000 in relief to those making $125,000 or less per year and forgives up to $20,000 for Pell Grant recipients. A University of Pennsylvania Wharton model from Aug. 26 predicted that student loan forgiveness will cost over $1 trillion. The non-partisan Committee for Responsible Federal Budget estimated that canceling student loan debt entirely would increase inflation by anywhere from 10 to 50 basis points (1 basis point = .01%).
The White House has touted a $1.7 trillion drop in the deficit, though most argue that less pandemic spending is the central reason for the easing deficit.