Inflation eats up gas and grocery budgets
Q&A: Inflation Gobbles Up Gas and Grocery Budgets
With US Senator Chuck Grassley
Q: What concerns do you hear about most in Iowa?
A: Undoubtedly, skyrocketing inflation is at the forefront of the minds of Iowans. Every time Iowans fill up on gas and go out for groceries, family budgets take a hit. Estimates show the average US household will spend $5,200 more this year than last on the same basket of goods. Consumer prices are the talk of the town at kitchen tables across America and at policy tables in Washington. Today’s 40-year high inflation is a stark reminder of the Carter administration when inflation was eating away at wages and savings. At the time, America was also facing an energy crisis. Cars lined up around the block to fill up at the pumps. American households, small businesses and family farmers remember what happened when inflation soared. The Federal Reserve began raising interest rates to curb inflation. As we saw in the 1970s and early 1980s, the Fed is in a tight spot to exploit inflation without tipping our economy into recession. In the 1970s, the combination of leaving inflation unchecked for too long followed by aggressive interest rate hikes from the Fed eventually led to double-digit mortgage rates, a steep decline in farmland values and to a recession. Skyrocketing interest rates pushed borrowers and job creators back and economic activity stagnated, leading to high unemployment amid an energy crisis and high oil prices. Stagflation has driven a stake through the heart of the US economy. Fast forward to 2022. Last year the Biden administration insisted that inflation was nothing to worry about and went on with a $2 trillion spending spree that I opposed and that no Republican supported. This was in addition to the $4 trillion in pandemic relief that Congress had already passed. Big spenders insisted inflation was only “transient” and blamed bottlenecks in the supply chain. Now that inflation, which has been high for 40 years, has gained a foothold, I fear that the failed policies of the Carter era are coming back from the dead to haunt us again. Liberals are already beginning to whisper about government price controls and tax hikes that would take us back to the “malaise” and stagnant economy of the Carter years. The Federal Reserve announces interest rate hikes in the coming months. He will have his work cut out to control inflation without slowing the economy. I know what it took to get us out of fiscal trouble when Iowans first elected me to Congress. I will continue to work to rein in reckless government spending that would add more fuel to the fires of inflation and make it harder than ever for families to make ends meet.
Q: What is your proposal to help reduce gasoline prices?
A: Unlike the Biden administration, I was a leading voice in a bipartisan coalition of lawmakers advocating for US energy independence. Oil price volatility underscores what I have been saying for years. Energy security is national security is economic security. The US economy should not be held hostage to geopolitical affairs dominated by the Organization of the Petroleum Exporting Countries (OPEC) and autocratic regimes like China, Russia, Iran and Venezuela. In total, OPEC and 10 non-OPEC members who coordinate with OPEC control 90% of proven oil reserves. OPEC’s stated mission is to “coordinate and unify the oil policies of its member countries”. This is the definition of anti-competitive conduct and collusion. I am spearheading the effort in Congress to pass the Prohibition of Petroleum Production and Export Cartels Act (NOPEC). My bill would empower the Justice Department to prosecute oil cartel members for violating antitrust laws. Once and for all, this would create an effective tool to ensure that American companies are no longer liable for the artificially inflated gasoline prices that hold American consumers hostage to higher prices at the pump. Notably, President Biden supported this measure during the Clinton and Bush administrations.
We must restore America’s energy independence. This means that we also need a comprehensive energy strategy. This includes drilling, fracking and mining to generate energy below ground and capture energy above ground with wind, solar and local biofuels. More recently, I am pushing the Biden administration to release higher blend biofuels into the fuel supply. If the Biden administration allowed E-15 to be sold year-round, consumers would be relieved at the pumps during the busy summer driving season. The green light for higher biofuel blends would lower gasoline prices for Americans and displace foreign oil. the Home Front Energy Independence Act, which Senator Joni Ernst and I lead, would make E-15 available all 12 months of the year, establish a tax incentive for biodiesel, ask the EPA to finalize its E-labeling rule 15 and would provide biofuel infrastructure and retailer compatibility. Higher ethanol blends mean lower emissions and better air quality; lower gas prices and more money in consumers’ pockets; and better corn prices for Iowa farmers. Biofuels are good, good, good for the United States