Feb 17, 2022 - Politics & Policy

Senate Dems ditching BBB as inflation fix

Illustration of a hand stopping an upward traveling arrow

Illustration: Annelise Capossela/Axios

Several Democratic senators facing re-election are looking past President Biden's stalled Build Back Better plans, ramping up other plans to try to ease voters' inflation fears.

Why it matters: They're making independent decisions to set themselves up for success in November, whether it's suspending the federal gas tax until 2023, extending homebuyers' deductions or other ideas.

  • But some of the moves may complicate Biden's hope of salvaging individual elements of his own plan.

What we're hearing: Inflation and the U.S. economy came up at a Thursday lunch with senators and White House officials — but not a strategy session about how to pass chunks of BBB.

  • "Well, there is no Build Back Better," Sen. Catherine Cortez Masto (D-Nev.) told Axios. She said negotiations to lower prescription drug costs may hold one key to combat inflation.

What we’re watching: Sen. Raphael Warnock (D-Ga.) this week pitched Senate Democratic colleagues on suspending state sales tax for some essential goods. He also introduced legislation to cap patients’ out-of-pocket insulin costs at $35 per month — which Majority Leader Chuck Schumer (D-N.Y.) said tonight would be a priority for the caucus in the coming weeks.

  • He's one of several Democrats who told Axios they're also concerned about corporations pushing brazen price spikes under the cover of inflation.
  • Last week, Sen. Maggie Hassan (D-N.H.) reached across the aisle to join with Sen. Roy Blunt (R-Mo.) on a bipartisan bill to provide tax relief to middle-class homeowners by permanently extending a tax deduction.

Sen. Mark Kelly (D-Ariz.) and Hassan last week proposed suspending the 18-cent federal gas tax until next year. Several frontline Democrats signed on, including Warnock and Cortez Masto.

  • The Washington Post notes there are questions about whether this would actually help consumers or gas producers more — and how hard it might be politically to ever end a suspension.
  • The senators say gas tax relief is an immediate and tangible measure to offset rising prices. "We have long-term issues, to look at the drivers of inflation," Hassan told Axios. "But in the short term, we have to do everything we can to lower people's costs."

Between the lines: Lawmakers also are talking about proposals to blunt price-gouging on staples from masks to meat. That is another example of looking past BBB — but it's largely in step with the president's own emphasis for months on probing price-gouging in energy and other sectors.

Be smart: The gas tax suspension was discussed at Senate Democrats' lunch on Tuesday, but Schumer said the caucus hadn't taken a position on it. It's also unclear how much Republican support it could get.

  • Sen. Chuck Grassley (R-Iowa) told Axios he's opposed to the idea. And Punchbowl reported that Sen. John Thune (R-S.D.) called it "a transparent political move" for Democrats in high gas-price states.

Be smart: Voters in some swing states are especially feeling inflation's brunt.

  • Consumer prices last year rose 10% in metro Atlanta, the fastest inflation growth since the early 1980s, according to the Bureau of Labor Statistics.
  • Nevada, Arizona and Pennsylvania are among the highest-priced states for fuel.
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