Carter ERRA official urges Biden to scrap economic agenda and reduce national debt to fight inflation

A Carter administration official offers President Joe Biden’s anti-inflation advice: He should drop what’s left of his economic agenda and focus on curbing the national debt instead to bring down high prices.

He said. Michael Blumenthal, former Treasury Secretary to President Jimmy Carter in the late 1970s, told The New York Times in an interview published Tuesday: “Fighting inflation comes first.” “It has to show recognition to the public that inflation has lasting adverse effects on the economy, and that by trying to take halving measures now, you are only prolonging the pain of those effects.”

“President Biden faces this dilemma, and I certainly hope he will make a clear choice, and he will choose decisively and be very clear about not only the fact that he understands that inflation has to be dealt with, but that he is really willing to support the painful steps to do so,” Blumenthal said.

It comes as Democrats struggle to combat inflation, which is now at its highest level in four decades. Carter’s term, which lasted from 1976 to 1980, was marked by a similar rise in gas prices as a result of the Arab oil embargo and the Iranian revolution.

Today’s high energy prices are the result of Western sanctions that have removed Russian oil from world markets, along with massive demand that is outstripping the available supply of oil. Biden and Democrats blame Russian President Vladimir Putin for driving up inflation, along with oil companies currently restricting domestic production.

The Democrats introduced a set of measures intended to provide financial relief, but they died by the time they got to Congress due to internal divisions and Republican resistance. Biden agreed to a proposal to suspend federal taxes on gas last month, but Democratic leaders have not committed to it.

The centerpiece of the Democrats’ agenda remains a downsized version of the party’s “Build Back Better” legislation from last year that appears likely to focus on clean energy tax credits and lowering the federal deficit. Democrats hope to woo Senator Joe Manchin of West Virginia, the holdout, to support a smaller package by the beginning of August. Republicans are vehemently opposed.

“They’re still playing with the BBB,” Senate Minority Leader Mitch McConnell said in Paducah, Kentucky Tuesday, referring to the stalled Better Rebuilding Plan that carries the bulk of the Democrats’ agenda. “If they bring it back, it will only make all of this exponentially worse.”

Analysis from Penn Wharton’s budget model at the University of Pennsylvania late last year indicated that the House-passed bill — which killed Manchin in December due to soaring inflation — would not dramatically exacerbate price hikes.