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Moderate Democrats Push Their Party to Do More to Fight Inflation

Patrick Semansky | AP
  • New Democrats are pushing for policy changes on tariffs, immigration and drug pricing to combat inflation.
  • Members sought input from top economists such as Jason Furman, Larry Summers and Wendy Edelberg.
  • A new letter urges House leadership to use every legislative week to pursue an "affordability agenda."

A coalition of moderate House Democrats is urging the party to fight harder to combat inflation, calling for action on issues ranging from tariffs to immigration and drug prices.

The list of proposals Wednesday from the New Democrats, the largest voting bloc in the caucus, calls for executive action by the White House and legislation in Congress. They aim to break through gridlock in Washington to answer increasingly anguished pleas from constituents who face rising prices at the pump and at the grocery store – before they vent their frustration at the polls in the midterm elections. 

"Good policy is good politics," Rep. Suzan DelBene, a Washington state Democrat and the group's chairwoman, told CNBC. "People want us to show them that governance is working and that we're focused on these issues and moving forward. That's what will impact voters this November."

The group spent months debating the recommendations and consulting with top economists such as former Obama advisor Jason Furman and the Brookings Institution's Wendy Edelberg. Former Treasury Secretary Larry Summers has endorsed the plan.

In a letter Wednesday, the New Democrats pushed House leadership to use "every legislative week to advance an affordability agenda."

The platform comes as the Biden administration ramps up its public response to inflation, which has strained consumers as it sits near 40-year highs. The White House has highlighted recent moves on fuel economy standards, oil supplies and student debt, which it says will help to rein in costs.

But several of the proposals from the New Democrats go beyond what the White House has embraced. Namely, the group called for broad exclusions to tariffs imposed by former President Donald Trump on Chinese imports and a suspension of trade barriers limiting food supply. 

"That's the one thing that would have the most immediate effect," said Rep. Scott Peters of California, the group's vice chairman of policy.

Earlier this week, Commerce Secretary Gina Raimondo said the administration is considering rolling back levies on items such as household goods. But the White House also faces pressure from labor groups to maintain a tough stance against Beijing. 

The New Dems are also urging the administration to continue releasing oil from the Strategic Petroleum Reserve to help bring down prices. So far, the White House has committed to releasing 1 million barrels a day for the next six months.

In addition, the group is emphasizing workforce and immigration: the coalition wants to reform licensing requirements and noncompete agreements, increase the number of high-skilled visas and create a pathway to citizenship for the so-called Dreamers.

"One important piece is not only to address the short-term impacts that we're seeing right now, but to really put together long-term planning in place to put us on solid footing for years to come," DelBene said.

One issue the group did not weigh in on is a federal gas tax. Several of its members have supported a temporary pause to provide relief at the pump. But Democratic leadership has been lukewarm on the idea, warning that oil companies may not pass the savings on to consumers. 

The internal debate has created an opening for Republicans to accuse Democrats of blaming others – from Big Oil to Russian President Vladimir Putin – for higher prices.

"The president doesn't have a serious plan to address inflation, and his so-called solutions will only make things worse," said Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means committee.  

Some of the New Democrats' proposals come from legislation they hope to hasten through Congress.

The group has been a strong supporter of the bipartisan innovation bill to address supply chain logjams, invest in next-generation research and development, and, perhaps most critically, provide $52 billion to support the domestic semiconductor industry. Democrats are already negotiating that bill with Republicans.

The group also outlined provisions from Democrats' now-defunct Build Back Better package that it could support in any new scaled-down version. They include extending subsidies for Affordable Care Act premiums, preserving the enhanced child tax credit, capping the cost of insulin and allowing Medicare to negotiate the cost of some drug prices. 

"Right now fighting inflation and reducing costs are Job One of Congress," Peters said. "This is an opportunity for us to show leadership and action."

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