The top White House economic adviser on Sunday acknowledged the pain for Americans of sharply rising consumer prices, saying that President Joe Biden remains open to the possibility of tapping the U.S. Strategic Petroleum Reserve to ease spiraling gasoline prices that motorists are paying at service stations.
“There's no doubt inflation is high right now,” Brian Deese, director of the National Economic Council, told NBC’s “Meet the Press” show. “It's affecting Americans’ pocketbooks. It's affecting their outlook.”
U.S. consumer prices jumped at an annualized rate of 6.2% in October, the biggest increase since 1990, the government’s Labor Department reported last week.
Higher energy and food prices have affected consumers the most, with consumer spending accounting for 70% of the U.S. economy, the world’s biggest.
Fuel costs for motorists are up sharply over the last year, with motorists now paying $3.30 a gallon (3.8 liters), $1.08 more than a year ago, the highest average price since 2014. The cost of grocery bills has risen 5.3% over the last year, with beef prices increasing markedly, further pinching household budgets.
Deese offered no immediate solution for the higher consumer prices, but said economic forecasters expect the inflation rate to decrease in 2022.
He said “all options are on the table” to curb rising prices, including tapping the Strategic Petroleum Reserve, where the U.S. currently has 612 million barrels of oil stored in four salt caverns along the Gulf of Mexico coast.
Some release of the reserve oil could be refined into gasoline for sale to motorists, which could in the short term ease gas prices at service station pumps. But U.S. presidents have only reluctantly tapped the reserve, instead holding it for use in the event of a possible true national emergency, such as a cutoff in Middle East and north Atlantic oil production.
The existing oil reserve is enough to replace more than half a year's worth of U.S. crude net imports.
Deese said three things have to occur to improve U.S. economic growth and curb inflation.
”One, we have to finish the job on COVID,” he said, with more vaccinations to curb the spread of the coronavirus that causes the illness. “We have to return to a sense of economic normalcy by getting more workplaces COVID-free; getting more kids vaccinated so more parents feel comfortable going to work.”
But Biden’s mandate that 84 million U.S. workers be vaccinated at workplaces with 100 or more employees has been at least temporarily blocked by a U.S. appellate court pending further court hearings.
Secondly, Deese said, “We've got to address the supply chain issue” of consumer goods arriving into the U.S. from Asia, with 83 container ships currently anchored off the Pacific Coast waiting for docking and unloading.
He said the $1.2 trillion infrastructure legislation Biden is signing Monday will help ease transportation bottlenecks in the U.S., but that construction work does not occur overnight.
Lastly, he called for congressional passage of Biden’s nearly $2 trillion social safety legislation to provide more financial, educational and health care assistance to all but the wealthiest American families. The House of Representatives is planning to vote on the measure this week, but its fate in the Senate remains uncertain.
Despite the immediate inflationary pressures on American consumers and Biden’s sharply declining voter approval standing, Deese said the economy has sharply improved since Biden took office last January.
“When the president took office, we were facing an all-out economic crisis,” Deese said. “Eighteen million people were collecting unemployment benefits. Three thousand people a day were dying of COVID. And because of the actions the president has taken, we're now seeing an economic recovery that most people didn't think was possible then.”
“Economic growth in America is outstripping any other developed country,” Deese said. “And the unemployment rate has come down to 4.6%; that's about two years faster than experts projected.”
But with higher consumer prices, the Democratic president’s Republican political foes are focusing on American pocketbooks as congressional elections halfway through Biden’s four-year presidential term loom in November of next year.
One Republican critic, Senator John Barrasso of Wyoming, told ABC’s “This Week” show, he would never have believed Biden would preside over the biggest increase in consumer prices in three decades.
But Barrasso blamed what he characterized as Biden’s “almost irreversibly bad” federal government spending choices, both for infrastructure and the pending social safety legislation.
The infrastructure legislation was approved with both Republican and Democratic support, but no Republicans have voiced support for the social safety net measure, forcing Democrats to attempt to pass it with their own votes.
