In March of last year, President Joe Biden signed the American Rescue Plan, a massive spending package known for its $1,400 checks. It was his first legislative accomplishment.
Now, around the anniversary, Biden finds himself unable to take a victory lap. Instead, he’s been defending the bill against accusations of contributing to inflation and high gas prices — but he’s lying.
“Make no mistake. The current spike in gas prices is largely the fault of Vladimir Putin. It has nothing to do with the American Rescue Plan,” Biden said on a video.
“Gasoline prices, home heating, oil prices are going to continue to go up because of these embargoes on Russian oil and other things that he has brought on.”
Take a look —
BIDEN: "The current spike in gas prices is largely the fault of Vladimir Putin. It has nothing to do with the American Rescue Plan." pic.twitter.com/ESxPNrlA8L
— Townhall.com (@townhallcom) March 14, 2022
BIDEN: "Gasoline prices, home heating, oil prices are going to continue to go up because of these embargoes on Russian oil and other things that [Putin] has brought on." pic.twitter.com/6p54RLn4cZ
— Townhall.com (@townhallcom) March 14, 2022
Administration officials defended the rescue plan as a necessary step to insulate the economy and promote a national rebound. They credit the plan with ensuring today’s low unemployment and rapid asset growth.
“Looking at how resilient and equitable the recovery has been in the face of delta, omicron and now military conflict in Europe, that strategy already looks wise,” said Gene Sperling, a Biden adviser tapped to oversee the legislation’s implementation.
Sure enough, the economy is growing more quickly in America than in other developed nations. Germany’s economy was shrinking last quarter, for example. But critics blame the rescue plan for contributing to rampant inflation by fueling consumer demand — including the demand for gasoline — beyond the capacity of suppliers, which have been hit with their own COVID lockdown issues.
“The gamble was it would create a success,” said Jason Furman, a Harvard professor and former top economic adviser to President Barack Obama. “But it contributed to inflation.”
Furman advised Obama about the 2009 stimulus package, and even Furman has estimated that the rescue plan is responsible for more than 30 percent of the increase in prices since January 2021.
Michael Strain, director of economic policy studies at the more conservative American Enterprise Institute, pegs the figure at about 37 percent.
“We really didn’t need another stimulus. The economy was already growing,” Strain said, noting that President Donald Trump had already signed two measures totaling $3.1 trillion before Biden took office.
Trump signed two of the three bills guaranteeing a stimulus check to eligible Americans. Biden approved another, more superfluous measure. Some critics have faulted the Biden administration for devoting too much money to stimulus and too little to unemployment insurance.
Biden administration officials reject those inflation estimates, pointing to a study from the San Francisco Federal Reserve Bank that said the rescue plan contributed to less than 1 percentage point of the increase.
“The stark reality is that there are higher prices and supply chain shocks in virtually every major economy in the world,” Sperling, Biden’s adviser, told the Associated Press.
Inflation has indeed risen worldwide amid supply issues, corporate profiteering, and embargoes against Russian energy. Plus, energy prices needed to rise; crude oil was selling less than zero dollars in March 2020.
However, American inflation has outpaced that of other developed countries like Germany and the United Kingdom. And just a one percent price increase is huge in the world’s largest economy.
Yet Biden said that inflation “has nothing to do with the American Rescue Plan.”
In other words, he lied.
The Horn editorial team and the Associated Press contributed to this article.