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President Biden delivers remarks at the White House on Dec. 9, 2021.

President Biden delivers remarks at the White House on Dec. 9, 2021. (Demetrius Freeman/The Washington Post)

WASHINGTON - Rising prices throughout the economy threaten to swamp the White House's legislative agenda during a critical moment for President Joe Biden, as persistently high inflation spooks both voters and lawmakers.

A government report released Friday showed that prices have risen nearly 7% in the past year - the biggest one-year surge since the early 1980s. A combination of soaring demand and supply disruptions has - for many Americans - tarnished an otherwise robust economic recovery.

The legislative implications of the new report could be immense. The primary Democratic holdout on Biden's $2 trillion tax and spending package is Sen. Joe Manchin of West Virginia. Manchin, for months, has cited inflation as one of his primary reasons for urging Democrats to proceed with caution, arguing that pumping more money into the economy could make inflation worse, not better. Since Manchin began airing concerns, inflation has only intensified in the United States and spread to a broader range of consumer products, including gasoline, rent and groceries.

Senate Democrats had hoped they could pass the spending measure in the next two weeks, but they do not have the votes if Manchin remains noncommittal.

Manchin didn't comment on the new inflation report Friday, and the senator will speak to the president early next week about the spending bill and inflation, the White House said. Asked Friday if he could get Manchin on board to support the social spending plan, Biden said he was unsure.

"I don't know the answer to that," the president told reporters.

Biden and his allies attempted to deflect mounting criticism of inflation by saying the new spending package is necessary to help Americans deal with rising costs. They said the spending package is designed to reduce families' costs on household items such as prescription drugs, housing and health care.

On Friday, Biden blamed supply chain dysfunction, not government spending, for pushing prices higher. Still, he referred to the current inflationary surge as a "real bump in the road."

"I think you'll see it change sooner, quicker, more rapidly than most people think. Every other aspect of the economy is racing ahead. It's doing incredibly well," Biden said. "But inflation is affecting people's lives."

He also said that prices on some products in recent days have eased, a dynamic that White House officials believe wasn't reflected in the new data. This line of reasoning, though, has proved to be a tough political sell.

Republicans argued that the inflation data showed the White House should abandon its spending plan altogether. On Friday, Senate Republicans touted a report from the nonpartisan Congressional Budget Office outlining how the cost of the Biden economic program would be much higher if the programs it created last 10 years. Democrats dismissed the report as misleading because they have said they would pay for any extensions of the programs with new revenue.

"Even with these big red flags, the Biden administration and my Democrat colleagues would rather spend trillions more on liberal wish list items with money we don't have instead of getting the problem under control," Sen. Shelley Moore Capito, R-W.Va., said in a statement. "These efforts will hit American families with higher prices and greater tax burdens when they can least afford it."

Administration officials are taking pains to emphasize that inflation is just one part of an economy that is otherwise strong by many measures. Roughly 13 million Americans quit their jobs between August and October in part because they had better opportunities and pay elsewhere, a trend with no precedent. The economy has created more than 6 million jobs since Biden took office, something that has also never happened before. The stock market is up roughly 25% and economic growth is surging far faster than most analysts predicted before this year. And the stock market continued to climb Friday even after the inflation figures were released because many investors believe the economy is set for more growth in 2022.

On Thursday, in anticipation of the inflation report, White House Chief of Staff Ron Klain released a video with charts illustrating ways in which the economy had healed with remarkable speed under the president's tenure. Klain and other senior administration officials have on Twitter expressed discontent with what they believe is the media's focus on negative economic trends.

On Friday, shortly after the big inflation report was released, Klain took to Twitter again, this time to say that gas prices are now below $3.10 a gallon in one-third of states.

"I understand why the White House is frustrated. We've had the media consistently emphasizing the bad things, while downplaying or outright ignoring what are really positive things in the economy," said Dean Baker, a liberal economist. "The media has been finding people who claim to be experiencing real hardship in the economy and telling stories that are either not true - or, if they are true, are incredibly idiosyncratic."

But other economists - including many liberals and allies of the White House - say that voter frustration with the economy reflects real challenges facing millions of Americans, primarily inflation that has reversed the growth in wages in the U.S. recovery.

Rapid job growth and plentiful job openings are helping people at the bottom of the income distribution, and economic growth is recovering at a faster pace than from any other recent major downturn. Yet most American families are seeing their wage increases erased by staggering price hikes over the last year, according to Jason Furman, an economist who served in the Obama administration.

Price increases are hitting every part of the income distribution, including the vast middle class, across key household necessities like fuel, food and housing. The rapid recovery of jobs at the bottom is critical for the lowest-wage Americans - including millions who have for decades suffered from sluggish economic growth - but primarily helps a relatively small portion of the country's population and voting base.

Americans have more money in their bank accounts compared to before the pandemic, due to stimulus checks and other coronavirus relief measures approved by the government that boosted family net worth. But that boost is starting to fade - stimulus payments were disbursed more than six months ago - and families received comparable amounts of government aid under the Trump administration.

"The typical family is spending an extra $4,000 this year because of excess inflation," Furman said. "It does not seem like much of a mystery why people are upset when they have to spend thousands of additional dollars more because of inflation."

The White House has said it is taking a range of actions designed to head off inflation, from coordinating a release of the gas reserves to looking at anti-competitive behavior in a range of industries pushing up consumers prices.

Still, some White House allies are urging the administration not to fixate on the media and instead emphasize that the president's economic agenda is designed to address strains on family budgets.

"I understand they're frustrated they're not getting any credit for the good stuff happening in the economy," one outside adviser in touch with White House officials said. "But this media conspiracy theory - the idea that this is driven by the media - is a bit much. Ninety-two percent of Americans say they're concerned about inflation. Name anything else 92% of Americans agree about."

Whatever the cause, there is growing evidence that voters are blaming Biden for high prices in a way that could spell political disaster for Democrats in 2022.

Roughly 70% of Americans rate the economy negatively, with nearly half of Americans and political independents blaming Biden for inflation, according to a recent Washington Post-ABC poll. Biden's approval rating on the economy has fallen dramatically, the poll found, with 55% of the country now viewing his economic stewardship negatively, compared to just 39% who view it positively.

Republicans say attempts to reframe the economy as a success for the country could backfire on Biden by making the White House appear out of touch.

"The more the White House tries to claim that the economy is hunky dory while families are struggling to fill their gas tank and put food on the table, the more out of touch they look," said Chris Hartline, communications director for the National Republican Senatorial Committee. "Voters just don't believe them."

Some White House officials have become exasperated by the negative perception of the economy, because they believe it has made a remarkable turnaround since Biden took office. As first reported by CNN, White House officials in recent days have briefed the television networks about the supply chain crisis in an attempt to improve economic coverage. Many liberal economists have echoed the administration's frustrations.

"It is surprising to me there's so little attention to very low unemployment, very historically low Black unemployment, very little receipt of unemployment insurance, unprecedented growth of jobs," said Larry Mishel, an economist at the Economic Policy Institute, a left-leaning think tank.

Rep. Tim Ryan, D-Ohio, said Democrats should not downplay the extent of inflation and instead emphasize that the White House is taking steps to address it through the Build Back Better agenda. Ryan said former president Barack Obama and 2016 presidential candidate Hillary Clinton were hurt by Democrats at the time who tried talking about the strength of the economy under the Obama administration even though many Americans didn't feel like the economy was strong. Democrats now risk making a similar mistake, Ryan said.

"You have to acknowledge where people are and the squeeze they are under. If we learned anything from the Obama to Clinton, they said the economy is going great and people say: 'Not really, not for us,' " said Ryan, who is running for the U.S. Senate. "You have to acknowledge the pain the people are under - and emphasize that's what's driving the agenda."

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