Senate Minority Leader Mitch McConnell (R-Ky.) said the American Rescue Plan Act’s $2 trillion price tag is the “gargantuan mistake” responsible for today’s inflation.
The economy dominated McConnell’s guest appearance at Florence Rotary Club on Monday. He said the $1.9 trillion investment of the American Rescue Plan Act is “entirely” responsible for the high prices Americans are seeing in today’s market.
He called it the “biggest domestic mistake” he has seen during his career in the Senate, to which he was first elected in 1984. Inflation hit 8.6% in May, a 40-year-high, according to the Labor Department. The Federal Reserve recently prescribed strong medicine for the record inflation by way of higher interest rates.
“The bad news is that about the only way we can fix inflation is by raising the federal interest rates, and you’re beginning to see that now,” McConnell said. “And when that begins to happen, then the signal is likely that you’re going to have some kind of economic slowdown … I think the only way out of that gargantuan mistake is probably going to create other economic problems.”
According to Washington, D.C. media reports, Federal Reserve Chairman Jerome Powell recently said a recession is possible but not likely.
When McConnell spoke to Kentuckians Monday, he said the economy is slowing down after experiencing a surge in spending as the COVID-19 pandemic waned. He also noted that President Joe Biden has an approval rating “below 40%,” which statistical analysis site FiveThirtyEight confirms, and he said voters may offer a “midterm report card” in the November elections.
He added that year two of the presidency has historically been the most challenging, recalling a notion of “buyer’s remorse” from previous administrations dating back to former President Bill Clinton.
He surmised that Biden, a Democrat whose party has slim majorities in both Congressional chambers, is in “tough shape” in his second year.
The arithmetic involving inflation and the Consumer Price Index is complicated and isn’t due to one thing – it’s a combination, according to Dr. Will Snell, of the University of Kentucky. A professor in the College of Agriculture, Food and Environment at the University of Kentucky, he testified to the Interim Joint Committee on Agriculture in early June to talk about the issue of inflation in Kentucky. Factors weighing on inflation include government spending, labor supply issues, supply chain disruptions, monetary policy, weather/disease events, and the war in Ukraine.
Beyond the executive branch and inflation, McConnell said focusing on supporting Ukrainians in their fight against Russia is a top priority.
“We have to beat the Russians in Ukraine,” he said. “Some of you may be thinking, ‘Oh, well we have enough problems at home. Why are we doing this?’ If we don’t stop the Russians in Ukraine, it’s going to cost us a whole lot more later.”
McConnell recalled a recent trip to Ukraine, and said President Volodymyr Zelenskyy is “a real inspiration.”
He described him as “Winston Churchill in a T-shirt” and concluded that a victory in Ukraine is going to be on Zelenskyy’s terms because “he’s got to live with it.”
“He’s not interested in giving up. They’re in a dog fight in the eastern part of the country, and I think our view ought to be (that) as long as they’re willing to fight, we need to help them fight,” McConnell said.
He added that other NATO countries share the responsibility of supporting Ukraine against Russia, and he urged listeners to not lose sight of why success for NATO countries is important.
“Even though we have a lot of domestic issues, I don’t want you to lose sight of this because I think this is critically important for the future of the world. America needs to lead,” he said, noting China is likely watching developments to calculate a possible move on Taiwan. “It’s important for the future of our country and for the world.”
