Commerce secretary acknowledges pain of inflation

Commerce Secretary Gina Raimondo on Sunday followed Treasury Secretary Janet Yellen in admitting that the Biden administration had gotten it wrong on how painful inflation would be.

“Inflation’s a problem, I will grant you that, and we will get it under control because we’re going to stick with it until we do,” Raimondo said Sunday on CNN’s “State of the Union.”

“I think I was wrong then about the path that inflation would take,” Yellen said in an interview Tuesday — in acknowledging the administration had underestimated the impact that inflation, which is at highs not seen since the 1980s, would have on the American people. “There have been unanticipated and large shocks to the economy that have boosted the energy and food prices, and supply bottlenecks that have affected our economy badly. That I didn't, at the time, fully understand.”

Inflation has emerged as a key issue in the midterms. In an ABC News/Ipsos poll released Sunday, only 28 percent approved of President Joe Biden's handling of inflation.

Raimondo rejected the idea that the American Rescue Plan passed last year contributed to the current rate of inflation.

“I shudder to think ... what we’d be living through right now if we didn’t have the American Rescue Plan,” Raimondo said. “Remember, that was the money for vaccinations, which actually allowed us to get everybody back to work. That was the money for emergency rental relief.”

Transportation Secretary Pete Buttigieg also defended the American Rescue Plan. Speaking on ABC's “This Week,” he said the nation's rate of unemployment, which is now at 3.6 percent, would be much higher without that economic relief package.

As for measures to mitigate inflation, Raimondo said the president is considering lifting some Trump-era tariffs on China. There are some products for which Raimondo said the tariffs need to stay in place as a matter of national security, like steel and aluminum. As for others, there is a possibility.

“I will say it depends on what we’re talking about and what kinds of products,” Raimondo said. “There are other products, you know, household goods, bicycles, et cetera, and it may make sense. And I know the president is looking at that.”

Like Yellen, the Commerce secretary also pointed to issues with supply bottlenecks: “The reality is, the cost of this inflation is the supply chain problems that were caused by Covid and we’re still struggling with.”

One example Raimondo highlighted is the shortage of semiconductor chips: “The whole economy went digital. Everything digital requires chips. And so demand is through the roof.”

She noted the administration is working with companies to increase production as a short-term fix. But Raimondo called on Congress to take action to alleviate the problem.

“There is one solution. It is not a hard solution. Congress needs to act and pass the chips bill. I don’t know why they’re delaying. It’s a national security issue.”