DV Journal

Delaware Valley Democrats, some already facing a tough electoral environment next year, got hit with more bad news Friday: Inflation reached a 39-year high, and voters believe the federal spending in Washington is part of the problem.

Friday morning, the Labor Department reported the consumer-price index jumped to its highest rate in 39 years, rising to 6.8 percent in November. It is the sixth consecutive month inflation was higher than 5 percent. That is a blow to Democrats like U.S. Reps. Chrissy Houlahan and Madeleine Dean, who voted for trillions in new federal spending and likely face serious challenges in the 2022 midterms.

Hours later, a new Congressional Budget Office analysis of the Biden administration’s Build Back Better spending plan found the bill would add $2.8 trillion more to the national debt than originally projected. Despite claims by President Joe Biden and Dean that the CBO found the BBB spending plan is “fully paid for,” the agency has always said the proposal will add between $160 billion and $367 billion to the deficit.

“This holiday season Pennsylvania families are having to empty their wallets for gas, groceries, and gifts—and some of them can’t afford all three. Prices have skyrocketed to a 39-year high and consumer prices in the Northeast are up a costly 6 percent,” said Pennsylvania Republican Party Chairman Lawrence Tabas. “Next November, Pennsylvania Democrats will be held responsible for Joe Biden’s reckless policies, which are hurting Main Street businesses, eating up workers’ gains, and crippling our economy.”

The cost of a frozen turkey for this past Thanksgiving was up 20 percent from last year, and the entire meal cost the average family 10 percent more.

Sen. Pat Toomey (R-Pa.) said, “Today’s jaw-dropping inflation report should alarm every single American, but especially policymakers. Hardworking American families are suffering as a direct result of the Biden administration’s reckless borrowing and spending and anti-energy policies. If the message wasn’t clear enough before, it’s crystal clear now. Democrats should immediately halt plans to advance their nearly $5 trillion spending spree and the Fed should quickly normalize monetary policy before it falls further behind the curve.”

Guy Ciarrocchi, a Republican running for governor who is on leave from his job as president of the Chester County Chamber of Commerce, said, “Inflation is the cruelest of all taxes. It eats away at a family’s savings each week, each month. The good news is that bad government policies created this; so good policies can fix it. Step one and two: Time for almost everyone to get back to work and let’s get Pennsylvania energy out of the ground.”

Some Democrats are pushing back and claiming costs are actually going down in December and contending their policies are working so the Christmas ham won’t be as pricey as the Thanksgiving gobbler.

“As we head into the holiday season, I recognize that the pressure of increased costs is weighing heavily on many Americans,” said Rep. Mary Gay Scanlon (D-Delaware Co.). “My colleagues and I are working hand-in-hand with the Biden administration to get people back to work, address supply chain issues, and lower prices — and there is good news on those fronts.

“Americans, on average, have about $100 more in their pockets each month than they did last year, even after adjusting for inflation, thanks to rising wages and the Child Tax Credit passed as part of the American Rescue Plan,” said Scanlon. “In December, costs have also been falling for gas, used cars, and other goods that are driving inflation; these changes aren’t reflected in the latest Consumer Price Index report. I know the past several months have been tough, but we’re moving in the right direction.”

But consumers and business owners are holding onto their wallets as polls consistently show voters believe federal spending is making inflation worse, not better.

Maryann Brown, a pharmacist living in Warminster, said gas prices are down a bit, but other items are up.

“Grocery prices are high so I shop at Aldi or a grocery outlet,” said Brown. “Electricity is going up so I turn off all unused lights. Stamps are up, so I’m sending out fewer cards this year. I use coupons like at Old Navy or Kohl’s ‘cash’ since the prices are up.”

Wendy Klinghoffer, executive director of the Eastern Montgomery County Chamber of Commerce, said, “Obviously, it’s a major issue because the cost of goods and services went up for both purchasing as well as personnel.”

“For small businesses in particular, this is problematic,” said Klinghoffer. While business owners are reluctant to pass costs along to consumers “at some point they have to in order to stay in business. They have to recoup their costs.”

Meanwhile, the restaurant sector was particularly hard hit during the pandemic shutdowns and is still struggling with food and wages now increasing due to inflation, she said.

Pennsylvania Chamber of Business and Industry President and CEO Gene Barr noted inflation is the highest since 1982.

“Our economy is already overwhelmed with supply-chain issues, a workforce shortage, and an increase in consumer demand, particularly during the holiday season,” Barr said. “A high inflation rate hampers economic recovery and can be particularly painful on small businesses as they are less able to withstand challenges to their financial goals. As products and services get more expensive, there is no doubt that consumption will continue to fall.”

Barr called on Congress to drop the pending tax and reconciliation bill that would add “another $150 billion in transfer payments and tax cuts, plus additional spending will be a recipe for disaster for more inflation over the next year. We must continue to prioritize rebuilding our economy, and this bill is a roadblock to long-term economic recovery.”

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Milk costs more. Meat is more expensive.  Clothing is pricier. New cars, even used cars–forget about it!

With the Consumer Price Index released on Wednesday showing a 6.2 percent increase over the last 12 months, inflation is now at a 31- year high. Wholesale prices are also rising, up 8.6 percent since this time last year.

What does that mean for families in the Delaware Valley?

Deanna Doane, president of the Wayne Business Association, said her members are seeing prices rise every day and have no choice but to pass costs on to their customers. For restaurants the price of food is higher and so is the cost of labor, she said.

“Now we are going to have to increase prices and that hits the local community. We are a restaurant town and it’s very hard for restaurants. (Inflation) makes it hard on small businesses,” said Doane, who owns Click Canyon Digital Marketing.

Asked on Facebook to comment on what they’ve bought recently that’s more expensive, Radnor resident Amy Wishner said paint, while Frank Clayton of Hamilton Square, N.J. said wood. He spent $400 for seven cedar planks for his deck.

“Inflation is the cruelest tax as it hurts everyone, everywhere, every day,” said Guy Ciarrocchi, president of the Chester County Chamber of Business & Industry and a Republican candidate for governor. “It’s been caused by very bad decisions—like stopping American energy production. It reduces the supply and forces us to import. That hurts us at the gas pump and heating our homes.

“Gov. Tom Wolf has made things worse by creating a workforce shortage, critics say. That also harms the supply chain and causes prices to go up—and gives consumers less selection. This government-caused problem must be fixed by government—now—so that private citizens can move on with our lives,” Ciarrocchi said.

Meanwhile, Nate Benefield, senior vice president at the Commonwealth Foundation, a free-market think tank, put the blame squarely on the federal government.

“The fact that inflation is at the highest level in decades should be no surprise to anyone,” said Benefield. “That’s what happens when the government prints more money to fund massive deficits. Voters are increasingly aware of the consequences of “free money”—higher prices, smaller packages, and shortages, all of which hurt low-income households the hardest. Policymakers—at the federal, state, and local levels—need to act now to rein in government spending to protect working families.”

But U.S. Representative Madeleine Dean (D-Montgomery) rejected the often-made argument that federal spending leads to inflation during a Zoom press conference to tout the recently approved $1.2 trillion infrastructure bill.

“This bill, the infrastructure bill, will be an economic engine,” said Dean. “It will relieve inflationary status right now…As we do invest in infrastructure, the supply chain problems will be eased.”

Republican Christian Nascimento, who is running for Dean’s seat, thinks Dean’s stance runs against basic economics and real-life experience. “People are finding that stores are out of stock on goods, and what they do have is more expensive than ever.  When consumers spend more on everyday goods, they have less money to save for an emergency. That puts families in a precarious position and can keep people from rising to the middle class.

“The local businesses that I speak with every day are being forced to raise their own prices due to their cost of goods rising – and that’s assuming that they can find employees to help them remain open. All that the (Biden) administration and members of Congress have been able to do lament high gas prices and suggest that we lower our expectations and consider this a ‘new normal.’

“My fear is that all of the impending and proposed government spending will make this situation that much worse, and continue to increase prices in anticipation of a flood of spending, without a significant improvement in the supply chain,” Nascimento said.

And David Galluch, a Republican candidate for Congress in Delaware County, said, “Inflation is taking its toll on everyone. Last month we saw the largest jump in prices on a yearly basis, 6.2 percent, in over 30 years. People are paying more for food, more for gas, and more for daily essentials they can’t live without. Growing up with a single mom, who worked two jobs most of my childhood, I know first-hand how hard these price increases are on all of us.

“Unfortunately, this spike in inflation may very well climb due to President Biden’s intention to increase government spending further. If he and Congress continue on their current course, inflation will continue unabated and the Fed may eventually need to raise interest rates sharply to counteract inflationary pressure. At that point, we risk a recession, which would further compound the pain American families will feel,” Galluch said.

Jeff Bartos, a Montgomery County businessman who is running for the U.S. Senate, agreed the Biden administration is to blame.

“As a direct result of Joe Biden’s disastrous economic policies, inflation is running away to record highs and is impacting Pennsylvania families every day,” Bartos said. “From the grocery store to the gas pump, working families are feeling the devastating effects of the Biden administration’s inflation crisis. Whether you are running a small business or in charge of your family’s finances, your hard-earned dollars aren’t going as far, and the rising price of everyday necessities is impacting your life. Make no mistake, this is Joe Biden’s tax on Main Street businesses and working families.”

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