Dem Rep. Himes: Inflation ‘Largely Managed’ by the Fed, Cutting Spending Would Be Debate of Cutting Defense or Social Security, Medicare

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On Friday’s broadcast of MSNBC’s “Katy Tur Reports,” Rep. Jim Himes (D-CT) said that “inflation is largely managed by the Federal Reserve,” and that while Congress could cut spending, “That would be a conversation about do we cut Social Security, do we cut Medicare the way the Republicans have proposed or do we cut defense spending?”

Himes said, “Inflation means something to people on the ground that is maybe different than what it means to economists. And what this bill will do…it will, for the first time ever, allow Medicare to negotiate with the big drug companies, using their heft to negotiate volume discounts, which, of course, is exactly what Ford Motor Company and any big buyer of anything does, in a way that will cause the cost of those prescription drugs to go down and it will put a cap of $2,000 on the out-of-pocket expenses [of] senior citizens. And remember, we’re talking about people on a fixed income here, it’ll put a cap on their out-of-pocket expenses. So, again, we could have a two-hour conversation about the nature of the CPI and everything, but this is going to reduce drug prices for senior citizens.”

Host Katy Tur then asked, “Fair, but inflation does have an actual definition. Why not just call it the, it’s going to make your life cheaper act, if that’s the case?”

Himes responded, “That’s just a lot of words. Well, no, I mean, Katy, look, if we’re really dealing in the world of reality here, you and I both know that inflation is largely managed by the Federal Reserve, and that, at this point, we could dramatically slash spending in this country. That’s a whole other conversation. That would be, as economists say, the fiscal side. We could. That would be a conversation about do we cut Social Security, do we cut Medicare the way the Republicans have proposed or do we cut defense spending? But really, right now, as we sit here, most of the action in fighting inflation is going to be at the Federal Reserve. And we’re already starting to see their actions take effect, as we saw in the last month, no increase month-on-month of inflation for American consumers.”

THE SECOND WAVE

Follow Ian Hanchett on Twitter @IanHanchett

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