Independent Vermont Sen. Bernie Sanders said Sunday on NBC’s “Meet the Press” that President Joe Biden’s “American Rescue Plan” did not contribute to record high inflation rates.
Inflation increased at 0.4% in September from August while “core” inflation, which measures the price of goods excluding food and energy, hit a 40-year-high, data from the Bureau of Labor Statistics show. Core inflation rose 6.6% year-over-year while the Consumer Price Index fell to 8.2% overall year-over-year despite spiking 0.4% in August.
“Senator, do you accept the criticism that the American Rescue Plan, passed in early 2021, contributed to the current inflation issue we’re dealing with now?” host Chuck Todd asked. (RELATED: Biden: If Republicans Win, Inflation Will Get ‘Worse’)
“No, I don’t. Inflation right now, as I’m sure you know Chuck, is an international problem. In Germany, is is 10%, U.K it is 10%, Canada, it is 7%. Inflation globally is caused by the pandemic and the break in supply chains,” Sanders said.
“It is caused by, in my view, the war in Ukraine, obviously, and it is also caused by incredible corporate greed. I hope everybody understands, that when you go to the gas tank, you fill up your car today, the oil companies are making huge profits, the food companies are making huge profits. Prescription drugs are high, pharmaceutical industry is making huge profits. We gotta deal with that issue.”
Biden signed the nearly $2 trillion American Rescue Plan in March of 2021, which included sending $1,400 stimulus checks to some Americans. Several economists, however, say while inflation would’ve likely risen given other factors, the so-called rescue plan made things worse, according to The Washington Post. Francesco Bianchi of Johns Hopkins University co-authored a paper that attributed about half of inflation to the rescue plan, according to The Washington Post.
Economist Dean Baker, who works with the left-leaning Center for Economic and Policy Research, estimated the plan increased inflation by about two percentage points, according to PolitiFact.
“My main basis for saying this is that other wealthy countries, without remotely comparable stimulus packages, have seen comparable jumps in their inflation rates.”
Four economists at the Federal Reserve Bank of San Francisco said the fiscal policies enacted throughout 2020 and 2021 contributed to increasing inflation, according to the report.
Former President Barack Obama’s economies adviser Lawrence Summers criticized the American Rescue Plan as driving up inflation, according to The Post.
“We certainly could have had a world in which we had protected the economy and generated far less inflation. The likely consequence of the inflation we have run — in addition to substantial reductions in the real wages of workers — is going to be to bring on the next recession sooner than we otherwise would have had it.”
Senior Fellow at the Brookings Institute said “we would have less inflation and fewer problems that we need to solve right now if the American Rescue Plan had been optimally sized,” according to Vox.
Mark Goldwein of the Committee for a Responsible Federal Budget said “The American Rescue Plan was far larger than the economy could support,” according to PolitiFact. Goldwein did, however, acknowledge inflation would still have risen without the plan.
“With no American Rescue Plan, we would still have inflation above the Federal Reserve’s target of 2% to 3%,” he said, according to the online fact checker.