Democrats are haunted by inflation
When it comes to this scary topic, they can’t just ‘change that subject’
We’re less than two weeks out from the congressional elections, and suddenly Democrats have discovered that their top issues for the past few months — democracy, abortion and their “historic legislative accomplishments” — are not the top issues for most voters. So, they decided to pivot to the economy. It hasn’t gone well.
First, House Majority Whip James E. Clyburn bungled an interview, telling MSNBC what the Democrats really knew about the inflationary impact of the American Rescue Plan: “All of us are concerned about these rising costs, and all of us knew this would be the case when we put in place this recovery program. Any time you put more money into the economy, prices tend to rise.”
Milton Friedman couldn’t have said it better. The pivot was already off track.
On Sunday, Nancy Pelosi, doing mop-up duty after Clyburn’s misstep, offered up a truly astonishing response on “Face the Nation” when asked what Democrats can do to prevent a GOP takeover of the House, predicted by CBS. The speaker told Margaret Brennan, “The fact is that when I hear people talk about inflation … we have to change that subject.”
“The fight is not about inflation. It’s about the cost of living,” she said, an odd argument given that most people would see this as a distinction without a difference.
Pelosi put her bet on touting the Inflation Reduction Act to bring voters into the Democratic fold, urging people to “look at what we have done to bring down the cost of prescription drugs, to bring down the cost of energy and the rest in our legislation.”
Does she not understand that her party’s overspending and the bad policies are what helped push up the cost of energy and prescription drugs in the first place, along with food, rent, home prices and everything else blowing up family budgets?
Pelosi also came up with her own economic theory on the impact of low unemployment on inflation, saying, “But the point is that when you reduce unemployment, it’s inflationary. That is a fact.” Maybe in her universe.
Her assertion simply doesn’t hold water and begs a simple question. If Pelosi is right, then why was inflation at only 1.7 percent when unemployment first hit 3.5 percent during the Trump administration (September 2019), but three years later, in September 2022, unemployment finally got back to 3.5 percent, yet inflation was a staggering 8.2 percent?
The answer is also simple. Pouring more federal dollars into an already overheated economy is the cause of today’s inflation, not jobs.
Despite the fact that Democrats knew their “recovery” plans were likely to increase inflation, they have spent the past few months promoting a base-driven national message that argued, “Donald Trump and MAGA Republicans are a threat to democracy, while Democrats will protect a woman’s right to an abortion and birth control and lower prescription drugs to help with inflation.”
In the latest “Winning the Issues” survey (Oct. 17-19, 1,300 registered voters), we tested that exact generic message against a Republican message focused on the economy and energy costs and found the GOP message outdid the Democrats’ by 9 points overall, 48 percent to 39 percent, and by 10 points with independents, 41 percent to 31 percent.
Even Democratic strategists have been waving red flags on their party’s messaging. Veteran political consultant Stan Greenberg offered up tough comments recently about Democratic messaging that emphasizes President Joe Biden’s so-called accomplishments. “It’s our worst performing message,” Greenberg told Politico’s West Wing Playbook. “I’ve tested it. I did Biden’s exact words, his exact speech. And that’s the test where we lost all of our leads. … It said to the voters that this election is about my accomplishments as a leader and not about the challenges you’re experiencing.”
But by Monday, it was Biden rolling out his new economic message in a campaign speech to the Democratic National Committee staff that took a slightly different tack. Like Pelosi, Biden took credit for what he and his supporters on the Hill say is incredible progress toward righting the sinking economic ship he inherited, but then, with all the audacity he could muster, the president actually told America that Democrats “are the ones that are fiscally responsible.”
Biden didn’t stop there. He took credit for “lowering” the deficit. “We’re investing in all of America,” he said, “reducing everyday costs while also lowering the deficit at the same time. Republicans are fiscally reckless, pushing tax cuts for the very wealthy that aren’t paid for, and [exploding] the deficit that is making inflation worse.”
But here again, as we’ve seen so many times in the past, Biden’s comments are factually inaccurate. In what appears to be his closing message, Biden now portrays himself as a fighter for lower deficits, when, in reality, 61 percent of the deficit reduction Biden claims actually came from increased revenues, not cuts in federal spending. And those increased revenues are the result, in large part, of the 2017 Tax Cuts and Jobs Act still in effect, tax cuts he calls “fiscally reckless.”
The CBO’s preliminary revenue figures for 2022 show that revenues this year will be the highest in history, a 43 percent increase over 2020. Over that same time period, individual income tax revenues have increased a whopping 64 percent, while corporate revenues have increased 100 percent, to $425 billion. Biden’s corporate tax increases, passed as part of the Inflation Reduction Act this summer, don’t kick in until 2023.
Meanwhile, as Democratic leaders throw one economic message after another at the wall and hope something sticks, voters are going to the polls knowing one thing for sure: Inflation has been at 8 percent or higher for the past seven months, and the Democrats’ answer seems to be, let’s “change that subject.”
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, as well as serving as an election analyst for CBS News.