Young
In light of high and accelerating inflation, U.S. Senators Todd Young (R-Ind.) and Mike Crapo (R-Idaho) joined other Senate Finance Committee Republicans in a letter asking the nonpartisan Congressional Budget Office (CBO) for detailed information on the harmful budget effects inflation has on the federal budget, American households, and businesses.
Two selections from the letter appear below:
“Increased inflation leads to more federal spending and more federal revenue. The added revenue stems partly, and unfortunately for taxpayers, from nominal inflationary gains that do not show up as purchasing-power-adjusted gains for federal taxpayers. The stealth-like nature of inflation taxes, and revenues that flow from them, should not be viewed as an economic plus.”
“Adverse effects of inflation on the federal budget, including likely increased payments to service outstanding debt, absorb fiscal space and crowd out a host of national priorities, ranging from low-income support programs to national defense to disaster relief.”
The senators also cite a budget workbook on CBO’s website that suggests a persistent 1 percent inflation increase above CBO’s baseline projection made early last year could increase deficits by nearly $2.3 trillion over a 10-year period. They ask CBO for a description of budgetary effects of high inflation, inflation that persists, and higher interest rates that can result from high inflation and possible Federal Reserve responses to inflation.
Click here to read the letter, which was signed by all Senate Finance Committee Republican members.