Inflation, Gas Shortage Highlight Peril That Could Threaten Biden's Agenda

May 15, 2021
Originally published on May 16, 2021 4:54 am

President Biden continues to get good marks for his handling of the most pressing issue of the day — the coronavirus pandemic. He also remains on average above 50% for his handling of the economy, which is closely tied to COVID-19.

But as things start to open up more and get back to normal — with the Centers for Disease Control and Prevention's new mask guidance for fully vaccinated people leading the way — there are crises or potential crises looming on the horizon.

For a couple of months, it's been clear that Americans have less confidence in the president's handling of immigration, for example. There has been a surge of migrants, including unaccompanied minors, at the southern U.S. border, and the Biden administration has struggled to respond.

This week, some new things got added to Biden's plate, including inflation, a run on gas and renewed fighting in the Middle East between Israel and Palestinians. They threaten to derail an agenda that has so far, for the most part, stayed on the tracks.

Asked about it Friday at the White House, press secretary Jen Psaki said, "This is exactly what he was elected to do, is to lead the country during a time of multiple crises" and that he put together a team "to be prepared in these moments."

A full plate, but empty pump

Inflation was the economic word of the week. Consumer prices went higher than expected, which sent some jitters through Wall Street.

Gas prices are up, and renewed travel this summer looks likely to keep them relatively high. Long gas lines across the East Coast, due to a ransomware attack on a major U.S. pipeline, caused a degree of panic at the pump this week.

Colonial Pipeline has brought its entire system back online, and Biden said he expects to see improvement this weekend "and into early next week."

"Don't panic, No. 1," he urged Thursday. "I know seeing lines at the pumps or gas stations with no gas can be extremely stressful, but this is a temporary situation."

People clearly panicked, however. There was video of a fight that broke out between a man and a woman over their spots in line at a North Carolina gas station. A couple was caught in Alabama filling multiple gas cans and putting them in the back of their car. A South Carolina woman, who was hoarding gas, tried to evade police, wound up crashing her car and caught on fire.

Add onto all of that unease smaller-than-expected job growth at the beginning of the month and burgeoning Middle East fighting.

Saying he wanted to bring "perspective" on the 266,000 added jobs, Biden noted that the "economy is moving in the right direction, but it's clear we have a long way to go."

He pointed out that the economy has added 1.5 million new jobs since he took office, "the most number of jobs created in the first three months of any presidency in our history."

Of course, there was a very deep hole created by the pandemic and the policy response to it. There are still more than 8 million fewer workers on payrolls than there were before the pandemic.

A stronger GOP negotiating hand?

Critics are also ringing alarms about the amount of money infused into the economy by the Biden COVID rescue plan.

"There's so much money out there in the economy that the demand is high, and it's outpacing supply, and it's starting to push prices up," Sen. John Thune, R-S.D., said this week before the inflation numbers were out. "We need to be a little more cautious and restrained."

Republicans certainly feel their negotiating hand is strengthened, compared to a couple weeks ago, when it comes to an infrastructure deal.

Biden has put forward an approximately $2 trillion plan, something that is a nonstarter with Republicans. They see too many extraneous items in it, like electric vehicle charging stations and other climate-related measures.

Biden argues those things are necessary to bridge the economy to where it should go in the future and that these investments are not unlike when railroad tracks and the interstate highway system were first proposed.

Nevertheless, Biden seems eager for a deal with Republicans on infrastructure. He held two meetings this week, trying to negotiate a bipartisan agreement.

Republican leaders want a deal on what they see as "traditional infrastructure" — repairs to roads and bridges, mostly. They have floated that they are willing to go as high as investing $800 billion, less than half of what Biden wants, but up $200 billion from what GOP senators had initially offered.

Of course, the two sides still don't agree on how to pay for it. Ironically, considering this week's gas line panic and increasing gas prices, Senate Republican Leader Mitch McConnell would like to raise the gas tax.

The gas tax, which is what largely funds federal infrastructure measures in the country, has not been raised since 1993 and is not indexed to inflation.

Senate Minority Leader Mitch McConnell, left, and House Minority Leader Kevin McCarthy speak to reporters outside the White House after meeting with President Biden Wednesday.
Evan Vucci / AP

But will that matter to Americans when they're paying more at the pump when traveling for Memorial Day Weekend? The Biden administration has already crossed that off the list as a potential source of revenue for this plan.

"No, that's not part of the conversation about this infrastructure bill," Transportation Secretary Pete Buttigieg said on CNN Monday.

Democrats are largely against what's known as user fees, because they are seen as regressive. In other words, they take a larger toll, so to speak, on those who make less.

Temporary blip or tip of the iceberg?

Much of the thorny new crop of issues is out of Biden's control, and the White House sees inflation as a temporary COVID-related blip — or hopes it will be.

"The expectation from economists, both inside and outside of the government, is that the impacts of our proposed investments are transitory, are temporary, and that the benefits far outweigh the risks," press secretary Psaki said Thursday.

But Republicans have seized on inflation and gas prices and are already attempting to compare Biden to former President Jimmy Carter, who faced unprecedented inflation and an oil shortage, which resulted in a gas crisis.

"I see that everybody is comparing Joe Biden to Jimmy Carter. It would seem to me that is very unfair to Jimmy Carter," said former President Donald Trump, who is still, at this point, the leading contender to the Republican presidential nominee in 2024. "Jimmy mishandled crisis after crisis, but Biden has CREATED crisis after crisis."

Let's be clear: This is not close to the 1970s yet. Inflation rose 4.2% this week, not 14%.

But that doesn't mean there isn't a potential political problem out there for Biden.

The president has shown a desire to stay the course on his agenda, but every president has to deal with unscripted crises.

Biden's ability to handle them is about to be tested.

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So far, President Joe Biden has taken on the challenges he expected - COVID, vaccination, schools, unemployment. He's also had some challenges he didn't expect, like gas shortages stemming from a ransomware attack on a pipeline and challenges he didn't expect to take on so soon, like the deepening crisis in the Middle East. Joining me now is NPR political editor Domenico Montanaro. Good morning.


GARCIA-NAVARRO: Let's start with the Middle East. Yesterday, Biden spoke separately with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas. What do you know about those calls?

MONTANARO: Well, the White House says that President Biden reaffirmed his strong support for Israel's right to defend itself against rocket attacks from Hamas and other terrorist groups in Gaza, it said. But he also voiced concern with Netanyahu about violent confrontations in the West Bank. He expressed support for a two-state solution, which we know has been elusive for decades for lots of U.S. presidents. Biden told Abbas that the U.S. was committed to strengthening the U.S.-Palestinian Partnership and again noted that a negotiated two-state solution is the best path to a lasting resolution.

In response to the Israeli airstrike in Gaza that destroyed the building housing the Associated Press and Al-Jazeera, White House Press Secretary Jen Psaki tweeted yesterday that the administration had, quote, "communicated directly to the Israelis that ensuring the safety and security of journalists and independent media is a paramount responsibility."

GARCIA-NAVARRO: Talk me through this, Domenico, because it sounds like the administration is really trying to walk a fine line here.

MONTANARO: Well, any time the U.S. has to deal with the Israel and - with Israel and Mideast peace, it's tricky. The U.S. has traditionally played a somewhat neutral peacemaker role. You might remember, under the Obama administration, the U.S. been pushing, you know, Israel to not expand settlements. But that was ignored. And after the Trump administration took a harder line in support of Israel, you know, it has made the Biden administration's ability to play that neutral peacemaker role a lot harder.

We know that that new administrations all the time are tested by adversaries and sometimes even allies like we're seeing here. And there's also a fine line at home - I mean, not alienating Americans who support Israel or those who are critical of its actions. We saw protests yesterday sweeping across major cities, calling on Israel to end its airstrikes. And there's now even a boycott of the White House virtual event tonight to recognize the Eid al-Fitr holiday. That's a religious holiday that marks the end of the month-long fast of Ramadan. The Council on American-Islamic Relations says that the Biden administration's response to the Mideast crisis has been, quote, "incredibly disappointing and deeply disturbing."

GARCIA-NAVARRO: All right. I just want to shift briefly to the Republicans because, you know, they voted last week to relieve Wyoming's Liz Cheney of her House leadership role and an interesting situation because she's been making the media rounds now, doing the exact thing that the GOP leadership said they wanted her to stop doing, which is forcefully pushing back against the false claims that former President Donald Trump was cheated out of reelection.

MONTANARO: Yeah, Liz Cheney is going to continue to be a thorn in the side of GOP leadership, especially House Minority Leader Kevin McCarthy. He wants to be speaker. He's made a gamble that, in order to win back the House next year, Republicans have to tie themselves to the Trump train. That's going to be tested. And we have to remember this all comes back to the violence on January 6 and the lie that President Trump continues to tell that he won when he did not.

GARCIA-NAVARRO: And just briefly, has the GOP created a bigger problem for itself?

MONTANARO: We'll see. You know, Cheney could have an impact because it's bad public relations the more she speaks out. But you're right. You know, a lot of people don't necessarily care what happens in Washington. And probably most people could have a hard time picking Kevin McCarthy out of a Rotary Club yearbook, frankly.

GARCIA-NAVARRO: That's NPR political editor Domenico Montanaro. Thank you very much.

MONTANARO: You're welcome. Transcript provided by NPR, Copyright NPR.