WASHINGTON — Commerce Secretary Gina Raimondo said Wednesday that she thinks inflation nationwide will continue rising for “months,” but argued that passage of President Joe Biden’s legislative agenda and a recently announced trade deal with the European Union would ease pressure on rising prices.
“This is certainly not permanent,” Raimondo told McClatchy in an interview. “This is the growing pains and the kinks of turning our economy back on. Whether that’s two months or six months, I’m not sure.”
The Commerce secretary does “not have a crystal ball,” she added, and cautioned about anyone making bold predictions about inflation because of the country’s unique recovery from the coronavirus pandemic.
Year-over-year price increases reached a 13-year high in September, according to the Bureau of Labor Statistics, and in polls, voters have cited it as an issue of rising concern.
One Democratic senator, Joe Manchin of West Virginia, has said the problem is a reason to delay passage of part of Biden’s congressional agenda, saying he needs more time to study the effect it will have on prices.
But Raimondo, a former Democratic governor of Rhode Island, said that passage of the president’s spending package will help sidelined employees return to the workforce, especially women forced to stay home because of high child care costs.
Further delays in passing the bill will harm the administration’s ability to reduce inflation, she warned, saying prices will eventually stop rising but that “it’ll take longer” until the agenda is passed.
“Why would you go back to work for a $20 an hour job if you have to pay 15 bucks an hour for a babysitter?” Raimondo said. “You’re not going to do it. So the president is saying invest in pre-K, so every three- and four-year-old can go to school just like kindergarten. That means mom can go to work full time. That will definitely help reduce inflation.”
In addition to universal pre-K, part of the president’s agenda calls for capping the cost of child care as a percentage of a family’s income, part of a multibillion-dollar subsidy designed to help parents with the cost while also boosting the pay of caregivers.
Raimondo spoke to McClatchy days after officials from the United States and European Union announced a new trade deal that allowed a certain amount of steel and aluminum to enter the United States without being subjected to a 25% tariff.
The European Union in turn dropped its own set of retaliatory tariffs, including one on American-made whiskey. Those tariffs were set to double from 25% to 50% in December if the two sides hadn’t struck a deal.
Lowering the price of steel and aluminum could help ease prices in a number of areas, Raimondo said.
“Steel’s in everything,” she said. “It’s a new car, it’s in your truck, getting a washing machine, dryers. So consumers … are gonna feel this in their pocketbook because steel prices are going to come down.”
Treasury Secretary Janet Yellen this week also said that trade deals could be one way to reduce inflationary pressure.
Republicans have seized on inflation as a primary part of their message in opposition to the president, arguing that his policies have encouraged rising prices.
Raimondo called the criticism “disingenuous,” saying that companies stopped placing orders when the pandemic began and that ramping up their activity now isn’t a simple task.
“We’ve never lived through this kind of disruption before,” she said.
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