Economic Recovery

Floor Speech

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Mr. McCONNELL. Key economic indicators continue to show that our Nation's recovery is still facing significant head winds.

Last week, we learned that inflation has logged its steepest increase since the 2008 financial crisis. There are more unfilled jobs in America than at any point on record, and, when asked, more than 90 percent of the small business owners trying to fill them say they are having trouble finding qualified candidates.

So how did we get here?

When COVID-19 arrived last spring, emergency shutdowns put the brakes on what had become a roaring economy. The pro-growth agenda enacted by Republicans had helped drive unemployment to its lowest level in a half-century. Take-home pay was rising and rising fastest for lower earners, and millions of new workers were coming off the sidelines to join a competitive market for American talent.

The past year presented harsh new challenges, but thanks to the bravery of frontline workers, the genius of scientists, and targeted, bipartisan relief measures passed here in Congress, our Nation was beginning to turn the corner.

The Biden administration actually inherited the conditions for success. It had a bipartisan roadmap of how best to support our economic recovery.

Alas, but instead, the Democrats chose to ram through trillions of dollars in liberal pet projects--a relative pittance for actual pandemic relief and a massive expansion of Federal unemployment benefits that has made staying home the most sensible financial decision for literally millions of American workers.

As one pair of economists put it recently, ``The stimulus bill stimulated unemployment, not employment.'' To be specific, their analysis found it created conditions in at least 19 States where a family of four could claim the equivalent of a six-figure salary by staying out of the workforce.

Let me say that again. One recent study found that in 19 States, a family of four, with two working parents, would have had to earn at an annual rate of more than $100,000 from working for it to make financial sense not to stay home. In 19 States, it made more sense to stay home than to go back to work.

But burying American workers in incentives to stay home hasn't just hurt rehiring; it has also magnified supply shortages. A few months back, the recovery made possible by bipartisan action last year had our economy geared up for a rush of consumer spending, but today, short- staffed producers are having to pass the rising costs on to households just as this rush was set to ramp up.

A tough year forced American families to put off some big purchases, but now they are facing some of the worst sticker shock in a generation. Used car prices are 30 percent higher than last year, and the cost of some home appliances has spiked nearly as much. Everyday essentials are getting pricier too. Milk is up 7 percent, and gas has jumped by more that 50 percent.

Consumers are feeling the real cost of what the White House Chief of Staff called ``the most progressive domestic legislation in a generation.'' But it didn't have to be this way. These are exactly the conditions economists have been writing about and warning about for months.

Back in March, the Washington Post ran an ominous line:

For policy experts and even members of Biden's own party, the improving picture is raising questions about whether the stimulus bill is mismatched--

Mismatched--

to the needs of the current moment.

Sure enough, not just any member of the President's party but a top economist under both the last two Democratic administrations, Larry Summers, cautioned even earlier that a massive spending plan like the one Democrats were proposing could ``set off inflationary pressures of a kind we have not seen in a generation.'' Prescient, to say the least. That is exactly what has happened.

These exact fears have been realized, and experts are still clear about the source of the problem. ``Labor shortages are the last thing that we need'' with inflation on the rise. Until very recently, the White House has been unwilling to connect these dots.

States have been on their own to turn off the perverse incentives driving the shortages. To date, 25 States have done so, announcing suspensions of excessive Federal unemployment supplements. But across the country, Main Street has already been feeling the pinch.

In my State of Kentucky, the consequences of Democrats' misguided spending are growing more serious. Small business owners in particular are nearing a breaking point. One restaurant owner in Clark County wrote to me to say that ``each week it gets harder to create a full schedule. Restaurants are already reducing hours of operation. Next will come closing.''

I have heard the same story from constituents all over the Commonwealth. A sign manufacturer in Woodford County had to ask his staff to work as many as 10 hours of overtime each week just to keep up with demand. An outdoor supplies maker in McCracken County saw shipping costs quadruple in the past year. He can't find a prospective employee who will even show up for an interview. He can't even find a prospective employee who will show up for an interview. After 25 years of production, he is facing the prospect that his company may not be able to stay afloat.

The Commonwealth still has 90,000 fewer workers than we did before the pandemic. In the past year, the Consumer Price Index in Kentucky and surrounding States has increased by a whopping 7 percent. The recovery teed up by smart, targeted, bipartisan policies last year has been buried under an ill-advised, self-inflicted avalanche--avalanche-- of spending. Folks in Kentucky know all too well what happens when Democrats get carried away here in Washington. They know who ends up footing the bill back home.

Higher prices at the gas pump and the grocery store, just as families were hoping to put a year of sacrifices in the rearview mirror--these are the real-world effects of the Biden administration's multitrillion- dollar economic debacle. These are the effects that Republicans and nonpartisan experts have warned about literally for months.

The American people are, nevertheless, resilient. Job creators, innovators, and skilled workers are ready. But as our economy slowly gets back up to speed, it certainly won't be because Democrats stroked an outsized check; it will be in spite of it.

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