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President Biden on Monday said Russian President Vladimir Putin and the COVID-19 pandemic were to blame for record high inflation in the United States and said the price hike had “nothing to do” with his administration’s policies.
The president spoke at the National League of Cities Congressional Cities Conference on Monday and spoke about rising U.S. gas prices as well as everyday household items.
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“We know families are still struggling with higher prices,” Biden said. “Let’s be absolutely clear as to why prices are high or high right now for two reasons.”
The first, according to Biden, has to do with “how the global economy works.”
(Chip Somodevilla/Mikhail Svetlov/Getty Images)
“A factory in Taiwan that makes computer chips is closing due to the COVID outbreak. This causes a ripple effect that slows down car production,” Biden said. “So, because of the pandemic, we have had major supply chain disruptions, and our supply chain is so important because so many materials are coming from elsewhere.”
“And now the second major cause of inflation is Vladimir Putin,” Biden said.
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“We have only seen the price of gas rise by more than a dollar since he deployed his troops on the border with Ukraine – they have risen in price by a dollar and five cents,” Biden said.
Russian President Vladimir Putin has signed a law that would allow journalists to be sentenced to 15 years in prison for spreading so-called “fake” news about his military invasion of Ukraine. (Yuri Kochetkov/Pool)
“A big part of that reason is that Putin started amassing troops along the border and then crossed it. And you know what? The world has noticed it,” Biden said. “The market expected, prices rose, and then Putin stepped in.”
He added: “Make no mistake, Vladimir Putin is largely to blame for the current surge in gas prices – he has nothing to do with the American rescue plan.”
Biden said that “rescuing our economy didn’t cause this problem” but promised to “fix it.”
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“We are building this economy from the bottom up, in the middle, and something incredible is happening,” he said. “We’re seeing a resurgence like never before – the pride that comes from stamping “Made in America” products.”
Meanwhile, inflation reached a new 40-year high in February. The CPI rose 7.9% year on year, according to data released Thursday by the Bureau of Labor Statistics. Month-on-month, according to the data, inflation rose by 0.8%.
The year-on-year figure is in line with estimates and compares with an annual jump of 7.5% in January, the fastest increase since February 1982, when inflation reached 7.6%.
Natural gas jumped 6.6% in February, accounting for almost a third of the price increase, according to Bureau of Labor Statistics data released Thursday. Food prices, by comparison, rose 1%.
The February data was recorded prior to the outbreak of the Russia-Ukraine conflict, which saw gas station prices rise to $4.31 today, according to AAA, an all-time high.
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Last week, Biden announced a ban on all imports of Russian oil, gas and energy to the United States, targeting the “main artery” of the Russian economy amid Russian President Vladimir Putin’s war with Ukraine. Biden warned that the ban would cost American families.
Russian oil exports account for about one-third of Europe’s oil imports, but Russian exports account for just under 10% of total US imports.
Amid rising gas prices, Biden has faced criticism from Republicans who have called on him to repeal executive orders canceling construction of the Keystone XL pipeline from Canada and freezing new oil and gas leases on federal lands.
Last week, White House press secretary Jen Psaki said reopening the Keystone XL gas pipeline was not one of the options under discussion to reduce rising gas prices for Americans.
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“If we are trying to increase the supply, it does not solve any problems,” Psaki said. “The pipeline is just a delivery mechanism – it’s not an oil field, so it doesn’t provide additional supply to the system.”
When asked again about whether the White House is considering restarting the pipeline, Psaki replied, “We don’t have plans for that, and it won’t solve any of the problems we currently have.”
Last week, Biden said it was “not true” that his administration was holding back domestic energy production, warning that gas prices would be “even higher” from their current record levels. And he reaffirmed his support for government spending on renewables and criticized the oil and gas industry for not taking full advantage of US drilling opportunities.