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Reducing inflation tops U.S. Rep. Gary Palmer’s 2023 priorities

As rising costs continue to plague Alabamians and the country at large, Republican U.S. Rep. Gary Palmer, who represents Alabama’s 6th Congressional District, told Alabama Daily News that one of his biggest priorities this year will be to help curb inflation.

While inflation rates in the United States have decreased over the past few months from their peak of 9.1% in July, 2022, the current rate of 6.4% still marks the highest such rate in more than 40 years.

Economists have pointed to a bevy of different factors contributing to the current inflation surge, including the supply chain crisis onset by the COVID-19 pandemic, increased government spending, corporate price gouging, as well as the war in Ukraine. How heavy a particular factor has contributed to inflation, however, is disputed.

The John Locke Foundation, a nonprofit conservative think tank, has largely blamed inflation on increased government spending, with the U.S. government spending a collective $19.65 trillion over the last three fiscal years from 2020-2022. This marks a considerable increase when compared to the previous three years’ collective $12.54 trillion in government spending.

Others, such as the Economic Policy Institute, a nonprofit left-leaning think tank, argue corporate price gouging to be a far greater factor in the current inflation surge. A 2022 study by the EPI attributed 53.9% of all price increases to fatter corporate profit margins, with the U.S. Bureau of Economic Analysis finding that aggregate corporate profit margins in 2022 were at their highest levels since 1950.

‘There are a lot of things driving inflation, but you cannot take energy out of that equation’

While agreeing that there were a number of factors contributing to inflation, Palmer pointed to President Joe Biden’s policies around energy as one of inflation’s key contributors.

“People are struggling, particularly with household energy costs; there’s 20 million Americans who are behind on their utility bills, and it’s because of these energy policies of the Biden Administration that make no sense,” Palmer said.

“We’ve got to get a handle on this, particularly on the natural gas side. I’ve had the opportunity to speak to a number of foreign dignitaries – particularly from Europe – and I’ve made this point, that the war in Ukraine did not create the energy crisis, it exposed it.”

As noted by Palmer, energy factors into the production of nearly all goods and services, with natural gas in particular being used for everything from fertilizer production to residential home heating.

“In (Biden’s) first week or so in office, he stops construction of the Keystone XL Pipeline, eliminates the permitting for taking energy from federal lands, and on top of that, his first year in office added over $200 billion in new regulatory costs,” Palmer said. “So we’ve got to address all those things to get inflation under control.”

Done through executive order, Biden revoked the permit for the construction of the Keystone XL Pipeline expansion in 2021. The expansion would have seen the construction of a new pipeline to transport crude oil from Alberta, Canada, to Steele City, Nebraska, where it would connect with existing pipelines.

Critics argued the cancellation eliminated more than 1,000 jobs, as well as hampered the United States’ ability to become more energy independent. Proponents of Biden’s decision argued that the particular type of oil that would be transported through the expansion – a petroleum deposit sometimes referred to as crude bitumen or tar sands – is especially harsh on the environment through both its harvesting and transportation.

Palmer’s comment regarding drilling on federal lands refers to Biden’s frequently touted campaign pledge to end all drilling on federal lands. 

In January, 2021, Biden issued an executive order pausing new leases from being issued for oil and gas drilling on public land. Yet despite the pledge being a major component of his campaign, Biden lifted the pause in April of 2022 amid rising gas prices, allowing for drilling to resume on public land.

Biden’s administration walked back another key environmental campaign promise in 2021 when, after an initial 2022 budget proposal included significant cuts to fossil fuel subsidies, those same subsidies and tax breaks were preserved in the final version of the budget.

“There’s an energy cost in everything that you consume or use,” Palmer said. “That gets passed on to the consumer, same thing’s true of regulatory costs. Business taxes, business regulations… businesses don’t pay taxes and regulatory costs, they pass it on to the consumer.”

According to the conservative think tank American Action Forum, the cumulative cost of new regulations passed during the first year of the Biden administration is estimated to be more than $201 billion

Examples of such regulations include a 2022 Environmental Protection Agency rule that regulates emissions by mandating all passenger cars and light trucks have an average fuel economy of 55 miles per gallon by 2026. While estimated to save American motorists between $210 and $420 billion through 2050 on fuel costs, the rule itself is estimated to cost auto manufacturers $180 billion.

‘We’ve got to look at bringing down spending’

Palmer said that beyond policies he believed were responsible for increased energy costs, increased government spending was also a key contributor to inflation. As part of his plan to curb inflation, Palmer said Congress should consider spending cuts.

“The Biden administration has done the things that will absolutely guarantee inflation,” Palmer said. “One was (to) increase the money supply with the legislation that the Democrats in Congress forced through (and) put trillions of dollars out there that really didn’t need to be out there.”

In addition, Palmer argued that increased funding for social welfare programs also played a role in rising inflation, saying that “we continue to pay people not to work.”

“The U.S. Department of Agriculture, without any input from Congress, extended the pandemic-level funding for food stamps – SNAP benefits – for another ten years,” Palmer said.

“The lowest estimate that I’ve seen is $200 billion, (and) the highest I’ve seen is $300 billion. They’re doing this stuff through executive order, through rule making, and they’re not going through the legislative process. We’ve got to address that too.”

The largest food assistance program in the United States, the Supplemental Nutrition Assistance Program supports around 42 million Americans and is managed by the U.S. Department of Agriculture. Of the program’s 42 million beneficiaries, 81% are “individuals who are part of a working family, a person with a severe disability, or a senior citizen living on a fixed income,” according to USDA Secretary Tom Vilsack.

In 2019, American households with SNAP beneficiaries received an average of $239 a month; SNAP beneficiaries in Alabama received an average of $242 a month. In August of 2021, the USDA updated the plan it uses to calculate SNAP benefits resulting in beneficiaries receiving an average boost of $36.24 per month.

The total cost of the SNAP program in 2021 was almost $183 billion, representing approximately 1.66% of U.S. government spending in 2021. For comparison, some of the U.S. government’s largest expenditures that year – Social Security, defense and Medicare – made up approximately 16%, 10.8% and 10% of total spending, respectively.

Ultimately, Palmer argued that the Biden administration’s policies on energy, as well as increased government spending, were the key drivers of inflation. With Republicans securing a thin majority in the House of Representatives during the 2022 election, Palmer said he hopes to be able to walk back some of these policies, and hopefully, reduce inflation for his constituents in Alabama and beyond.

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