American families are feeling the financial squeeze of soaring inflation and a persistent pandemic as fractious Democrats return to Washington this week no closer to a deal on a tax and spending bill party leaders hoped would by now provide relief.
Despite gangbusters growth at a 6.9% annual rate during the final quarter of 2021, other economic measures tell a very different story. Average wages are falling behind inflation and consumer sentiment plummeted in January to the lowest in more than a decade.
More Americans are having trouble paying their bills than at any time since last March, shortly before the Biden administration began distributing stimulus checks and other relief measures. Hunger is rising again.
It’s an ominous start to a midterm election year for Democrats struggling to hold on to razor-thin majorities in Congress. President Joe Biden began his term with ambitions to address long-festering economic inequalities and lift prospects for the poor and middle class but an intra-party rift has halted progress on his centerpiece tax and social spending plan.
“We’re learning once again the pandemic is hitting families hard financially,” said Claudia Sahm, director of macroeconomic research at the Jain Family Institute and a former Federal Reserve Economist. “It’s the people who have the least that continue to suffer the most.”
The financial squeeze many families feel may ease once the omicron wave subsides. But new progress remains vulnerable to COVID-19 variants, continued supply chain snarls and the Federal Reserve’s ability to reduce inflation without choking off growth too much. The public isn’t optimistic, with only a third in the University of Michigan Consumer Sentiment Index survey expecting the economy to improve in the year ahead.
Senators expect informal conversations to resume this week on Biden’s Build Back Better package, which was stymied in December after West Virginia Democrat Joe Manchin said he opposed it. With Republicans uniformly opposed and the Senate divided 50-50, Democrats need Manchin’s vote.
Senate Democratic vote-counter Dick Durbin of Illinois said he is urging Manchin and another holdout, Arizona Senator Kyrsten Sinema, to make a deal.
while admitting he hasn’t had any signal from them that they will.
“I don’t want to give up on it,” Durbin said, citing the popularity of elements like cutting drug costs. “Let’s find the things that really make the biggest difference, let’s move them as quickly as we can.”
“We have debated it long enough,” he said.
House Progressives Democrats have tried to set March 1 — the date of Biden’s first State of the Union address to Congress — as the latest deadline for a deal. But Speaker Nancy Pelosi on Friday cast doubt on that goal.
“We don’t have a timetable,” Pelosi said during an appearance in her hometown of San Francisco. “We will pass the bill when we have the votes to pass the bill.”
Democrats still don’t know what Manchin will ultimately agree to and whether he will insist on waiting for lower monthly inflation numbers to act on the measure.
Manchin speaking on local radio last week said that persistent inflation is a reason to hold off on more government spending.
