Just as the breakneck pace of inflation seemed to be slowing, U.S. lawmakers took steps that could ensure it’s the reprieve itself that is transitory.
It was almost easy to miss the $3.5 trillion budget resolution passed by the Senate at around 4 a.m. Wednesday, sandwiched, as it was, between the Senate’s passage of a $1 trillion bipartisan infrastructure package a day earlier and July’s cooler consumer-price index, which was released hours later.
The budget blueprint, however, has larger economic implications than either—and could elevate inflation from a temporary annoyance to a perpetual problem.
The new infrastructure spending bill, despite the dramatics of its passage, won’t impact the economy all that much. The Penn Wharton Budget Model projects the package—which would represent one of the biggest federal investments in roads, rails, and bridges in decades—will have no significant effect on gross domestic product over the next decade or in the long run, by which economists mean the year 2050.
As inflation continues its upward trend, government programs are giving Americans raises to keep up.
The Biden administration announced Monday a historic increase to the Supplemental Nutritional Assistance Program (SNAP), also known as food stamps. The U.S. Department of Agriculture updated the Thrifty Food Plan, a wide-ranging report that updates the expected cost to healthily feed a family of four.
The federal food report cited inflation as the driving factor behind the need for more benefits, which is the biggest increase in the program’s history.
“Using food prices inflated to June 2021, the cost of the Market Baskets for the reference family is $835.57 per month, which is a 21.03-percent increase from the previous edition adjusted for current prices,” the report said. “This amount is for the 48 contiguous States and the District of Columbia. Alaska and Hawaii have separate Thrifty Food Plan amounts, which are also undergoing a reevaluation. This means the reference family of four is provided with an additional $4.79 per day to support a healthy diet.”
The roughly 42 million Americans receiving SNAP benefits will see a 27% increase.
“As a result, the average SNAP benefit – excluding additional funds provided as part of pandemic relief – will increase by $36.24 per person, per month, or $1.19 per day, for Fiscal Year 2022 beginning on October 1, 2021,” the USDA said.