The House Financial Services Committee held the House of Representative’s first hearing solely on inflation entitled, “The Inflation Equation: Corporate Profiteering, Supply Chain Bottlenecks, and COVID-19.” After months of consumer prices surging at a record pace, Democrats have finally recognized that inflation is hurting American families. However, as the Democrats’ title of the hearing shows, they’re more interested in blaming everyone but themselves for the effects of their own failed policies.
Committee Republicans, led by Ranking Member Patrick McHenry (NC-10), will outline how Democrats’ reckless fiscal policies fueled inflation and debunk Democrat disinformation about the causes of rising prices.
Watch Republican Leader McHenry’s opening remarks here.
Read Republican Leader McHenry’s opening remarks as prepared for delivery:
“Thank you, Madam Chair.
“If Democrats are looking to crack the code on the ‘inflation equation,’ I would suggest a little self-reflection.
“Today’s hearing title shows Democrats want to blame high prices on everything: corporate greed, broken supply chains, and even the COVID-19 virus.
“But here’s the irony. They’ve left out the one thing that economists of all political stripes have pointed to as the leading cause of record price increases: the massive injection of federal spending that occurred over the past year.
“The Biden Administration’s American Rescue Plan plowed nearly $2 trillion dollars into an already strong economy. This caused consumer spending to rise more rapidly than the economy’s productive capacity.
“This is basic economics. Widespread, out-of-control inflation is the natural consequence of dumping unnecessary cash into an economy already well into recovery from pandemic disruptions.
“And now, my constituents and yours are paying the price for all that ‘free money.’
“By the end of last year, the expenses for many working families exceeded their incomes, despite any wage gains.
“The outlook, at least in the short run, doesn’t look any better.
“Until we have an honest conversation about the root cause of inflation, we’re not going to get anywhere.
“My colleagues across the aisle want to talk about so-called corporate profiteering. Let’s talk about that.
“‘Profit’ is not synonymous with ‘greed.’
“You don’t have to take my word for it.
“Former Democratic Treasury Secretary, Larry Summers, and Jason Furman, a top economist in the Obama administration, have been openly critical of the attempts to blame corporations for inflation.
“According to Summers, ‘Business bashing is terrible economics and not very good politics…’ I agree.
“Businesses have certain fixed operational costs, just like we do at home.
“And things that make the cost of running a business more expensive—you know, like taxes and regulations—those things get included in the final prices that customers have to pay.
“So as wages remain stagnant, American families are finding it harder and harder to keep up. You hear it around kitchen tables across the country.
“Housing costs more. Food costs more. Even baby formula costs more—that’s if you can find it because there’s a dangerous nationwide shortage.
“So that leads me to the next so-called cause of inflation according to Democrats: supply chain bottlenecks.
“Steven Rattner, who served as counselor to the Treasury Secretary in the Obama administration, noted that ‘Blaming inflation on supply lines is like complaining about your sweater keeping you too warm after you’ve added several logs to the fireplace…The bulk of our supply problems are the product of an overstimulated economy, not the cause of it.’
“In short, Democrats’ reckless fiscal agenda fueled a spending spree right at the moment our supply logistics were under the most strain.
“Supply issues are a product of excessive demand that happens by default after a huge government cash dump.
“And then there are the billions of dollars in new regulatory burdens and the ongoing impacts of Democrats’ Main Street Shutdowns during the pandemic.
“The Small Business Committee Republican Leader, Congressman Luetkemeyer, calculated the Biden Administration has produced 283 new regulatory rules—and more on the way—with an estimated cost to businesses of $201 billion dollars.
“The private sector has been forced to jump through hoops to meet local, state, and federal regulations in their attempts to solve supply chain issues.
“Meanwhile, the previous administration’s incredible efforts to cut duplicative, overburdensome regulations and support private sector endeavors have been scrapped out of political expediency.
“It’s time to stop chasing what feels good politically.
“We must restore fiscal discipline and promote policies that support energy independence and long-term economic prosperity.
“Until we do that, Democrats will keep throwing flimsy excuses at the wall to see what sticks.
“And Americans are tired of cleaning up the mess.
“I yield back.”