Kamalaflation: How Harris Caused Inflation By Casting Decisive Votes For Biden’s Economic Agenda thumbnail

Kamalaflation: How Harris Caused Inflation By Casting Decisive Votes For Biden’s Economic Agenda

By John Carney

Estimated Reading Time: 2 minutes

Democrat strategists hope that Kamala Harris can avoid responsibility for the inflation surge that soured the public on President Biden but the critical role she played in passing the legislation that fueled the worst price increases in four decades will make that a challenge.

The Biden-Harris administration’s sweeping $1.9 trillion American Rescue Plan passed a deeply divided Senate in March of 2021 only after Harris cast the tie-breaking vote in favor of the pandemic spending bill that even prominent Democrat economists had warned would overheat the economy.

Republicans voted unanimously against it, criticizing the measure as unnecessary, unaffordable, and dangerously inflationary. Even prominent economists associated with liberal politics and the Democratic Party like Larry Summers and Olivier Blanchard had warned that the American Rescue Plan could cause significant inflation. Summers called it the “least responsible” economic policy in 40 years, arguing that it would push demand beyond the capacity of the economy and lead to sustained inflation. Similarly, Blanchard expressed concerns that the scale of the spending would create significant inflationary pressures, potentially harming economic stability in the long run.

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Those warnings proved prescient. Shortly after Harris cast her vote securing passage in the Senate of one of the largest increases in deficit spending in a generation, long-dormant inflation arose across the U.S. economy and pushed inflation to levels not seen in decades. By the following summer, inflation peaked at nine percent, the fastest pace of price increases since 1981.

The inflationary package, which became law after it was passed by the House and signed into law by Biden a short time later, was the first major legislative initiative of the Biden-Harris administration. Although the economy was already growing rapidly and workers were returning to work as lockdowns were lifted, the Biden-Harris administration sought to put their stamp on the recovery in hopes of denying former President Trump’s pandemic aid measures credit.

For Biden and Harris, passage of the bill was very much seen as a political necessity even if it were not economically needed. At the first Democratic presidential debate in 2019, Harris, then a senator from California, had lashed out at the Trump economy. She said that Trump’s economy was “not working for working people,” claims belied by the lowest unemployment in decades, low interest rates, low inflation, and the best wage growth in a generation…

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Photo credit: Gage Skidmore

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