- Manchin says the government should pump the brakes on more federal spending with inflation on the rise.
- It cuts the odds that he'll vote for more government spending anytime soon.
- He's opened the door to a Democrat-only deficit-reduction bill.
Sen. Joe Manchin assailed the prospect of additional federal spending on Thursday, arguing that the government should focus more on fighting inflation and cutting deficits.
On Thursday, a new report from the Bureau of Labor Statistics showed consumer prices rose 7.5% year-over-year last month, pushing inflation to its highest level in 40 years. Prices rose across the board for used cars, groceries, furniture, and rental cars. Inflation is rising due to supply-chain bottlenecks and persistent labor shortages, contributing to rising prices in nearly every sector of the economy.
"Once again, we are witnessing that the threat of inflation is real," Manchin said in a statement following the release. "Inflation taxes are draining the hard-earned wages of every American, and it's causing real and severe economic pain that can no longer be ignored."
He also warned about the national debt continuing "a historic climb" above $30 trillion and slammed Congress for wanting to approve more spending.
"We must get serious about the finances of our country," he said. "It's time we start acting like stewards of our economy and the money the American people entrust their government with."
Manchin's statement dampens the prospects that anything resembling President Joe Biden's stalled social and climate package will pass anytime soon.
The conservative West Virginia Democrat put a dagger in the House-approved package at the end of December. Without his vote, Democrats can't pass any plan over united GOP opposition. There's been very few signs of progress towards a skinnier bill in recent weeks.
Manchin has devoted a significant amount of time instead on negotiating a bipartisan elections reform package in tandem with a year-long government funding bill. Manchin told reporters Tuesday that he wasn't involved in talks around Biden's spending plan.
But Manchin has cracked the door open to voting for a smaller, targeted bill that cuts the deficit. "We have to basically get our financial house in order," he told Insider on Tuesday. "That's the whole purpose of reconciliation."
Putting a chunk of the money in the Democrat-only package towards deficit reduction could entice Manchin to back a future bill, some Democrats believe. Sen. Jon Tester of Montana recently told Insider said he thinks Manchin "would be more inclined to" vote for a bill that's structured like that.
Democrats have pledged to fully finance their ambitions with tax increases on the richest Americans along with large firms that pay little or nothing in taxes. Many economists say a plan fully offset with tax hikes likely wouldn't worsen inflation.
"What Congress and the President could do is pass something like Build Back Better that provides more relief from these rising prices. And it would not further add to the price increases if it is paid for," Jason Furman, an Obama administration economist, wrote on Twitter. "Throw in a little deficit reduction as insurance if you want."
Biden said in a statement that the administration will "continue to be all hands on deck" in efforts to cut inflation. Other administration officials argue inflation will lessen as virus cases begin to drop.
"The hope is, and what I firmly believe, that by the end of this year the inflationary pressures will be less than they are today," Secretary of Labor Marty Walsh said in a Tuesday interview prior to the CPI release. "But again, we don't know. The virus is unpredictable."