By David Morgan

WASHINGTON, (Reuters) – While Democrats are struggling to pass President Joe Biden’s climate and social change agenda, Republicans continue to hurl accusations at them that their policy decisions have driven up inflation and made life more expensive for Americans.

For four consecutive months, the U.S. consumer prices index has increased at a rate of more than 5% annually while the economy is suffering from the COVID-19 pandemic and labor shortages. Late last month, Janet Yellen, Treasury Secretary, predicted that inflation will remain high through next year.

“There is no relief. This is a result of flood the country, said Mitch McConnell (the Senate’s top Republican), last week. “The last thing that we should do is add another huge, reckless tax to our spending and tax spree.”

McConnell gave his remarks during a brief 13-minute news conference. During this time, McConnell and his leadership team discussed inflation and rising prices.

Are Republicans correct to place higher prices on Biden or the Democrats? Not entirely.

WHAT IS HAPPENING ABROAD THE GLOBE

The United States is hardly alone https://www.reuters.com/business/only-way-is-up-corporate-chiefs-warn-prices-2021-10-21 in enduring a bout of stiff inflation.

The Organization for Economic Cooperation and Development has tracked inflation in 38 countries. This is due in large part to the rise in global energy prices. The last 18 months have seen oil prices quadruple as energy demand has recovered and economies have reopened after COVID-19 shut downs.

(GRAPHIC: Global inflation perks up – https://graphics.reuters.com/USA-BIDEN/INFRASTRUCTURE-INFLATION/xmvjolwagpr/chart.png)

HOW ABOUT STIMULUS SPENDING?

Biden’s multitrillion-dollar legislative plan, which promises more and floods the economy with spending by government agencies, is the main Republican argument.

His agenda includes the $1.9 trillion American Rescue Plan https://www.reuters.com/article/us-health-coronavirus-biden/biden-all-u-s-adults-to-be-eligible-for-vaccines-by-may-some-normalcy-coming-by-summer-idUSKBN2B31DN – the only plank so far enacted – and a yet-to-pass $1 trillion infrastructure bill. After that will come his “Build Back Better https://www.reuters.com/world/us/schumer-manchin-continuing-talks-with-biden-delaware-source-2021-10-24” social and climate spending package, which is anticipated to cost around $1.75 trillion.

However, the inflation rates of dozens and even dozens goods that American households regularly purchase – food included – had already reached their highest level in 10 years before Biden became the White House’s first White House member.

This is due in large part to the COVID-19 emergency relief funding enacted by Republican Donald Trump’s administration, which received overwhelming Republican support from the Senate. By roughly $1 trillion, it exceeds the amount Democrats have so far allocated.

This money allowed households to maintain their balance sheets during crisis, and consumers were able to continue spending even though they had double the unemployment rate. Additionally, household savings soared to new heights, allowing consumers to continue spending even when it was difficult for them to do so.

(GRAPHIC: Key inflation gauges started rising in 2020 – https://graphics.reuters.com/USA-BIDEN/INFRASTRUCTURE-INFLATION/dwvkramxxpm/chart.png)

Republicans point to concerns raised by former Treasury Secretary Larry Summers, a Democrat who warned in a February Washington Post Op-Ed https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus that Biden’s American Rescue Plan could fuel inflation. But other economists, including Mark Zandi of Moody’s (NYSE:) Analytics https://www.moodysanalytics.com/-/media/article/2021/macroeconomic-consequences-infrastructure.pdf, have since said that the Biden agenda is more likely to lift the economy’s long-term growth prospects and ease inflation.

VACCINE MANDATES AND INFLATION

Republicans claim Biden’s COVID-19 vaccine mandates https://www.reuters.com/world/us/biden-deliver-six-step-plan-covid-19-pandemic-2021-09-09 for most federal workers and for private businesses with more than 100 employees are exacerbating a national labor shortage at a time when inflationary pressures are affecting both wages https://www.reuters.com/business/us-economy-grew-modest-moderate-rate-feds-beige-book-2021-10-20 and prices.

While it is true that unemployment and growth in the workforce have been slowing in recent months, employers are still having trouble finding employees. There were 10.4 million jobs available in August, which was close to a new record.

The deadline to comply with the mandate for vaccines is more than one month away. However, large corporations have started to express concerns about the ability to hire and retain workers due to it. Others, like United Airlines https://www.reuters.com/business/healthcare-pharmaceuticals/united-airlines-says-more-than-99-us-employees-have-been-vaccinated-2021-09-28, said they saw a surge in applications for employment after adopting vaccine mandates.

The mandates are aimed at protecting Americans from COVID-19, at a time when only 67% of the U.S. population has received at least one dose of a vaccine, according to the Reuters COVID-19 Vaccine Tracker https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access.

Republicans claim that mandates force workers to refuse to get vaccinated from the workforce.

While thousands of workers https://www.reuters.com/world/us/us-workers-face-layoffs-us-covid-19-vaccine-mandates-kick-2021-10-19 across the United States do face potential job losses, vaccine resistance is strongest in Republican-led states where it has been largely reinforced by Republican officials.

WHAT DID ENHANCED UNEMPLOYMENT BENEFITS DO?

Republicans argue that “exorbitant handouts https://www.foxbusiness.com/politics/fix-supply-chain-crisis-incentives-return-to-work-rep-hern-rep-harshbarger” from the federal government, including a $300 weekly federal pandemic unemployment benefit, also have contributed to the labor shortage and rise in inflation.

However, the unemployment payments that were stopped in September appear to have had a limited effect on participation in the labor market. The mostly Republican-led states that blocked the payments added jobs in August at less than half the pace https://www.reuters.com/business/amid-covid-surge-states-that-cut-benefits-still-see-no-hiring-boost-2021-09-17 of other states that allowed the payments to flow.

What effect does SUPPLY-CHAIN have on WOES?

Republicans want Biden to be blamed for inflating the supply chain shortage.

But experts say the COVID-19 pandemic has disrupted every aspect of the global supply chain https://www.reuters.com/business/few-options-g7-trade-chiefs-alleviate-supply-pinch-2021-10-21, from manufacturing and transportation to logistics, and not only in the United States but worldwide, at a time when the pandemic has also sparked a buying spree. This problem partly stems from a long-standing business strategy of keeping inventories small.