America's Talking - Episode 6: Fed Reserve Chair tells Congress inflation to be 'elevated for months'

Episode Date: July 16, 2021

Federal Reserve Chairman Jerome Powell tried to calm lawmakers’ fears about rising inflation but also said it would probably remain elevated for months to come. Testifying before Congress this week, Powell said the Federal Reserve was willing to step in to address the situation, but that inflation should level out next year. Powell’s testimony comes on the heels of troubling news of a major spike in inflation. The Bureau of Labor Statistics Tuesday released federal data showing the largest one-month spike in consumer prices in more than a decade. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to American Focus, powered by thecenter Square.com. I'm Dan McAulb, executive editor of the Center Square Newswire Service, and this is the 28th week of 2021. Coming up, we'll be taking a look at some of the headlines that dominated the news in the nation's capital, including the Federal Reserve Chairman's testimony before Congress on rising inflation concerns. Analysis of a new poll that indicates pandemic-enhanced unemployment benefits have spurred the hiring crisis. the battle over voting law changes in the states, and more. All of this is coming right up on the American Focus podcast, powered by thecentersquare.com. Hi, this is Chris Krug, publisher of the Center Square.

Our team produces the nationally read and recognized news stories at thecentersquare.com, the country's fastest growing, non-profit, nonpartisan, state-focused news and information site. We deliver essential information with a taxpayer's sensibility through reporting that's easy to understand and easy to share with your friends and family. We know that you need information that allows you to understand what the governor and your local legislators are doing. Get the news that you need to know at thecentersquare.com. That's the center square.com. The center square dot com. Welcome back. Here are the top stories of the week on the center square.com. Federal Reserve Chairman Jerome Powell tried to calm lawmakers' fears about rising

inflation in testimony before a congressional committee this week. But he also said inflation would probably remain elevated for months to come. Inflation has caused a spike in prices for consumers at the grocery store, gas stations, and elsewhere. What did Powell say Americans should expect? Also this week, a new survey of more than 5,000 adults indicates that many Americans have been turning down jobs even though they were unemployed, saying that they receive enough in unemployment benefits without having to work. Republicans have been making that argument for months, and more than 20 Republican-led states have ended their participation in a federal supplemental unemployment program that's providing $300 a week in extra payments on top of state benefits.

Now, joining me today from the nation's capital to analyze these stories and more is Casey Harper, D.C. Bureau Chief for the Center Square. Casey, how are you today? Dan, good to talk to you. What a big week in news this week. It seems like every week is a big news week in Washington. DC inside the capital city. So Casey, we're recording this on Friday, July 16th. Why don't we start with the Federal Reserve Chairman's testimony? I know many Americans are worried about rising consumer prices. What can you tell us about what Jerome Powell told Congress? Yeah, thanks. You point out that many Americans are worried about this. I try to not be an alarmist when it comes to economic

data, you know, the stock market goes up, the stock market goes down, and I'm not one to jump on the daily changes. But I do think there is reason for real concern when we deal with this inflation. We've seen the federal inflation data has shown extremely, I won't say extremely, but very high levels of inflation over the last few months. And that's what made this hearing with the Fed chairman, Jerome Powell, this week, a very anticipated hearing, who's really pressure. by lawmakers, especially Republican lawmakers over, you know, the cause of inflation, what's going to be done about it, what should be done about it. And for listeners who don't know, the Federal Reserve probably has the most of any federal body to do with inflation. And they

adjust interest rates, which can, you know, increase or decrease inflation as we feel it needs. Now, there's other economic impacts when they do that. But the thing that really caught people's eye about what the Fed chairman said was that he expects inflation policy, inflation to remain elevated for several months. But then there's also kind of this thing of, you know, don't worry, it'll kind of level, take care of itself by next year. But I think a lot of Republicans are really suspicious of that. Like, don't worry, it'll kind of fix itself because a lot of experts had predicted

that the inflation we're seeing now wouldn't have gotten this high. So it's already gotten worse than many experts predicted. And so when experts tell you that it's just going to go away, some people are suspicious of that. Right. And so a new data released this week shows that the All-Items Index, which is essentially consumer prices overall, increased 5.4% year over year from June of 2020 to June of 2021, 5.4%. is significant. It's the highest since the great recession of earlier this century. And generally, wages don't increase that much. So what it means is more of consumers' paychecks are going towards the price of food, the price of gasoline and other energy projects, products. I know used cars and trucks, for example, is one of the items that is spurring inflation. So essentially,

what it means is consumers have less money to spend. How can that affect it? Can that have an impact on the overall economy? Absolutely. I do want to, you know, I somehow find a way to tease you about this every week, but you said earlier this century, and I'm kind of afraid of the day when I start marking time in centuries, which is where you seem to be now of your own admission. I was looking for 2008, 2009, sorry. That is typically accurate. Counting in centuries helps you keep track of your lifespan and I won't fault you for it. But so, oh boy, there we go. So it does have a big impact in the economy, especially, you know, we talk a lot about, you know, Democrats particularly talk a lot about the fairness of taxes and taxing the wealthy at higher rates.

And, you know, there's, I think the average American understands that and is behind that. But the biggest problem with inflation is, one of the biggest problems is that it's a regressive tax in a way, which means that it hits the poor Americans harder because it's going to be on everyday goods. You know, inflation doesn't just affect yachts and private jets. It affects when you go to buy cereal for your kids at the grocery store, when you're filling up the gas tank, when you're paying your electricity bill, when you're trying to buy a new used car. Actually, those examples that it's listed are some of the highest levels of inflation. have been in used cars, your electricity bill filling up at the gas tank. And so this is something that hits, you know, regular Americans and poor Americans the hardest because it's a higher percentage of their income.

And so a wealthy American, you know, paying, you know, even more at the gas pump may not affect them much. But when you're pitching pennies, you're counting, you know, trying to keep a tight budget, it can make a big difference when your energy bill goes up maybe 50% or, you know, gas goes up 50%. It's a big impact for people. And it's something we should take seriously. And I think it doesn't look like it's going away anytime soon. Well, we'll have to keep an eye on that, of course, because as you mentioned, it impacts everybody,

particularly the lower income and middle income families who have less discretionary dollars to spend on such items. Why don't we move on Casey? you talk about another headline this week. A new survey from Morning Consult was released Wednesday that essentially found an argument that Republicans have been making for months now that these supplemental federal unemployment benefits, these extra $300 a week in unemployment benefits, are keeping people from returning to the workforce.

What else can you tell us about this survey? Yeah, just for people who haven't been following this story, a quick, a very short history lesson is, Earlier this year, Congress passed a, Congress. We're going to talk about COVID forever. You can be excused. Well, Congress, not to be confused with a different virus called COVID. Yeah, past legislation earlier this year, a $1.9 trillion relief bill.

And there's several things in that that we can talk about. But one of them was these federal unemployment benefits. Now, normally unemployment benefits were handled by the states. They very, you know, they come on a weekly basis for Americans who are out of work. But these new payments were $300 a week for on top of state benefits. And basically what we saw in the following months was even as we rebounded from much of the joblessness during COVID, there's so there's way more jobs available, but people weren't going back to work. And so this is clearly a big problem. A lot of employers are complaining they can't hire people.

And Republicans began to, you know, as you mentioned, over two dozen states, Republican-led states pulled out of the federal program because they said the reason people aren't going back to work is because the unemployment benefits make it more advantageous to stay home. And there's been a lot of debate over that. A lot of Democrats said, oh, come on, people want to work. They're not going to take advantage of the system. And Republicans have said, well, why would you go back to a minimum wage job, particularly when you can make a comparable rate by staying home?

And so the debate has been going on. And then you mentioned the morning consult survey came out. It found that 1.8 million Americans have turned down jobs. These unemployed Americans said in the survey, they turned down jobs. And the quote that they said in the survey was, quote, I receive enough unemployment benefits without having to work. Wow. Yeah, and so, yeah, go ahead.

I was going to say, first, Casey, I want to let you know. I think your toast is done. Yeah, got it. Yeah, I think that's your toast. No way to pray who's toast it was. So this federal program is set to expire in September. Many Republican states, as I've mentioned, Republican-led states have already pulled out of the program, meaning they're not allowing these $300 in additional weekly unemployment benefits to go to their unemployed workers.

What's the feeling about whether or not Congress might try and extend those beyond September, giving the jobs crisis? Of course, many businesses have said that they're having a hard time attracting workers to come back to the workplace in large part because of these supplemental benefits. What's the feeling? What's the temperature in Congress regarding whether or not they might, because these have been, essentially, these first went into place in March of 2020, and they've been extended several times since then. Do you think another extension is going to happen? What's your feeling? Well, I, man, predicting that extension is a really difficult call. But what I can tell you is, as much has been going on in Congress right now, I really think we're in the column before the storm. We have a few. few key provisions that are set to expire in September. And between that and, you know, Democrats talk about reconciliation, $3.5 trillion package. I think we are actually in a relatively quiet place right now. And after members come back from the August recess, we're just going to see the kind of the battle that's been building all year over this, over, you know, whether we continue

this unemployment benefits, you know, yeah, you can have a poll. that says people aren't going back to work, you can, you know, have some momentum at the state level for Republicans. But when it comes down to it, it's really hard to get rid of entitlement programs, even when data is on, you know, showing one thing or you have some evidence showing economic harm. People get used to $300 weekly checks. And so when you talk about politicians are still politicians and taking that money away from people is going to be, I think, a hard political pill for, you know, many people to swallow, especially. Democrats who are still arguing that, you know, some people are hurting from COVID. People still need this money. So I think it's going to be right down the middle.

I think it's going to be, you know, Republican versus Democrat. There's going to be a few people, you know, votes in the middle that kind of decide this issue along with several of the other issues that we've been talking about every week, the reconciliation infrastructure, even the, you know, there's going to be debate over whether we continue the child tax credits. So we'll see. We'll see. Yeah.

This certainly is a, like most everything in Washington, it's an extremely partisan issue with, I would assume, most, if not all, Republicans in both the House and Senate would be against extending these federal unemployment benefits. Many Democrats seem to indicate that they might be in favor of extending them, given the jobs crisis that America is in and that employers are. saying that they're facing, it'll be interesting to see how that goes, something that will be keeping an eye on at thecenter square.com. Talking about partisan issues, some more Casey, President Biden this week, blasted Republicans back in the states over various voting law changes that they've either made or are attempting to make. What's Biden's take on it? what's happening? So I don't know if you heard, but there was just a little bit of controversy over the 2020

elect presidential election. And so they, yeah, and so in response to that, a lot of Republican state legislatures have passed different voting measures. Honestly, many of them were pretty tame, not too out of the ordinary, just shoring up different things. But there have been several states that have done it. You may remember that Arizona Supreme Court case that was recently, decided on where the Supreme Court decided with Arizona and said basically that Arizona's

updates to their election law didn't wasn't beyond the pale in any way. But Biden, you know, gave a speech this week and really chastised Republicans. And one of his quotes, have you no shame. That's my question for you, Dan, but have you no shame. And I really, you know, one thing that's tied to this is the issue of immigration because. You know, we've heard a lot about immigration from the south to the north in recent months, but I've personally experienced it now with about 70 Democrats immigrating north from Texas to Washington, D.C. I don't know if you have any thoughts on those guys, that new surge in immigration that we're experiencing. Well, you can't, when you're talking about voting law changes, particularly this week, you can't ignore what's been going on in Texas.

it's kind of crazy. More than 60 state house Democrats from Texas fled the state, actually got on a couple of private jets and flew to Washington, D.C., to avoid debate, and to avoid a vote in the Texas legislature on voting reform changes that Republicans want, essentially saying they were looked, the Democrats, the Democrats, argument in Texas and elsewhere across the country is that Republicans are trying to suppress the vote in their states. Republicans are saying, no, they just want to tighten up and unify, make uniform voting laws. So procedures are, procedures county by county across the state of Texas, in this case, are uniform. Things like when early voting hours are,

how you can mail and vote during 2020 when COVID, of course, was a concern. Many states expanded mail-in voting and expanded early voting hours and things like that. Texas Republicans are just trying to make those laws uniform across the state. Democrats are saying that Republicans want to suppress minority votes in particular, and the rhetoric over this thing from the Texas Democrats to President Biden and across the country has just heated up. I think President Biden has sent something along the lines of this is the biggest threat to civil rights in the U.S. since I guess I can't remember exactly what he was comparing it to.

But the drama that's going on in Texas right now, these Democrats remain in D.C. The governor of Texas, Greg Abbott, a Republican, has said when these Democrats return to the state, he's going to have them arrested and dragged back to the state capital so the debate can continue and votes can happen on these reform efforts. It's been quite a spectacle. Our Texas correspondent, Bethany blankly warned me about three weeks ago that this thing was going to be. crazy and it's turned into crazy. So I don't know what to expect out of there. They can't stay obviously in Washington, D.C. forever. Governor Abbott back in Texas has said he's going to keep this special session to address these election reforms going until a vote does happen. So I don't

know. What do you anticipate? Yeah, I think the quote you're referring to, I don't think he compared to anything, he just had the most dangerous threat in history, which he did get some pushback on when you consider some of, you know, Jim Crow era laws and, you know, voting tests. I mean, America's had a lot of voting restrictions. I'm not sure that the Texas, one of the recent Texas law is really quite in that category. But, you know, it is, this has really been an interesting time of political theater. this reminds me of the government shutdowns. We see these kind of things periodically pop up.

I don't know if you remember Ted Cruz reading green eggs and ham on the floor of the Senate. We kind of see these things pop up. And it's always interesting because it's so clearly just everything is playing to the media and trying to play to people's public opinion. And the crowd is really fickle. So I think you can never really predict who is going to win in these PR public opinion back and forth battles. because, you know, the Democrats in this case can have all the, they had all this support behind them,

and then the picture came out on the jet and they weren't wearing masks, right? And so they got a lot of pushback for that. But then they landed at a had a press conference, and so it felt like they were winning. And so the thing that'll be really interesting to watch is how Texans particularly feel about Abbott arresting members. I think that's a pretty, it's obviously a very bold move. I think it's a risky move.

you know, Texas, I'm from Texas originally, and we're a different kind of people. We appreciate bold action. But at the same time, I'm not sure how that's going to come across. I think that'll be the real test. There's kind of a rule in politics that the cover-up is worse than the crime, right? And this could be a case of the reaction is worse than the Democrats' flight, you know, but we'll see. It's this really, I think the actual vote, the legislation, I think that votes going to happen. It's going to work itself out. Right now, it's really just a battle over public opinion. We'll see. I do agree that the Democrats, I don't think, they can't hold that forever, obviously. In Texas, the House rules does address this. It does provide the Speaker of the House

to call for the Sergeant-in-Arms if there's an absence, an unexcused absence by lawmakers. It does allow the sergeant-in-arms to arrest legislators who are not, who are delinquent, essentially, from the House floor. I agree that public opinion is probably going to be a factor in all of this, because when you're threatened to arrest lawmakers, that's an unusual step. but will Texas Democrats voluntarily return to the House? Will it take some kind of confrontation with law enforcement? We'll see, but it's certainly interesting political theater. Why don't we move on, Casey, another headline this week, has to do with violence in major cities across the U.S.

President Biden says he has a plan. What's he pitching when it comes to curbing violence in America's biggest cities? You're absolutely right that there's been a big surge in violence. I mean, just one stat to third you. This is from the Law Enforcement Legal Defense Fund, so that from 2019 to 2020, murders increased by 25%. And a one-year gap. I mean, so at that pace, you're on track to double every four years, basically, the number of murders.

And so it's clearly an unsustainable, you know, pace. And it's gotten a lot of people's attention. Clearly, it comes in the aftermath of the, you know, tragic death of George Floyd. And then the riots all around the country that followed that, a lot of moves to defund police. Some cities were successful in cutting back, cutting funding for police. There's been a lot of reporting on, you know, police officers not feeling supported because of these cutbacks because of the rhetoric from local leaders, even all the way up, you know, highest officials in the country. So there's, you know, we've seen several cities where police officers have quit in droves. And so all this kind of plays into this bigger question of, you know,

what is causing the spike in violent crime in particular? And I will say that some people might try to talk this up to COVID, but the data really doesn't support that. This is not a COVID phenomenon. on. We've just seen it. It plays out longer than that. The numbers just show that it's bigger than COVID. And so what Biden, you know, Biden is trying to address this. And he unveiled this kind of crime plan. I think he's taking a kind of moderate approach. And he said, we've been at this a long time. I've been working on this most of my career. While there's no one size fits all approach, we know there are some things that work. And here's the real quote. And the first of those, a Monk that work is stemming the flow of firearms used to commit violent crimes. So that right there is, you know, shows you the focus of Biden's plan, which is curbing guns. He's really taking it back to a main Democratic talking point. But I think the trouble he's going to have and has had selling that plan is this is not Biden's crime plan in 2017. This is a post-George Floyd, post-defund the police, post-months and months of rioting plan.

And so I think he's having trouble selling this, you know, gun violence is behind all this when people know that there's such a bigger narrative going on. A couple things that I want to just comment on regarding what you just said. President Biden himself on the defund the police movement. President Biden has rejected that. He says he opposes defund the police efforts that have largely been spurred by Democrats. Two Second Amendment advocates, of course, are going to fight to the end on any efforts to curb gun rights for Americans. So President Biden certainly would have a big political fight on his hands if he does try and curb certain Second Amendment rights. And then third, the violence itself is horrible. And you feel for the folks who are stuck in inner cities, particularly in the worst neighborhoods.

But there's a larger impact, too. I live in the suburbs of Chicago where every weekend the top headline is how many shootings there were, how many people died as a result of gun violence. It's affecting tourism. It's affecting travel to the inner cities from folks in the suburbs. People are having second thoughts about going into Chicago because of this violence. And the carjackings is another. a big issue in Chicago and other major cities.

So there's no doubt something has to be done to curb this violence because of the impact, just on, one, the impact on the victims and two, just on the economy in general. Good. Yeah, I would just say you're right. And I do want to just say what you said, which is Biden has said that does not support defunding the police, though many, you know, other very vocal Democrats at the local level and at the federal level have expressed those sentiments. And in some ways, you know, it's kind of a problem of federal politics is, you know, are all problems solvable by the federal government?

Can the federal government really affect local crime in a significant way? Or is that a job more for local officials and the local police departments. And I don't know that we can answer that question right now on this podcast, but I think that's kind of a part in question that to be in the minds of listeners as they themselves think about this issue and what they can even do in their own communities. Well, we'll keep following at the center square.com. But Casey, we are out of time this week. Thank you for joining me.

This has been the America in Focus podcast powered by the center square.com. We'll talk to you next week. Thank you.