HARRISBURG — Misguided and out-of-touch government policies have driven inflation to historic highs across the Commonwealth and the country.
Members of the House Majority Policy Committee, chaired by Rep. Martin Causer, R-Turtlepoint, heard testimony during two public hearings this week about how those policies are devastating hard-working Pennsylvanians and their families, as well as employers.
“Working families are being crushed by the high rate of inflation, which is at a 40-year high in this country,” Causer said. “This week’s hearings provided valuable insight from the state’s financial leaders and economics scholars about inflation, and many of their recommendations reaffirmed policy priorities advanced by House Republicans.”
Those priorities include curbing state spending, investing in the Rainy Day Fund and stopping overregulation that is both driving up consumer costs and hindering economic opportunity. While acknowledging that many factors contributing to high inflation are beyond the control of state government, these suggestions could be implemented on the state level to help ease inflationary pressures on the economy.
In testimony Wednesday, Matthew Knittel, director of the state’s Independent Fiscal Office, warned the Commonwealth and the nation will likely be facing inflation well into next year and beyond, and those impacts will eventually catch up to the state budget. He encouraged lawmakers to take any steps possible to help alleviate the burden on taxpayers and employers.
Treasurer Stacy Garrity said Thursday the state is likely to face a fiscal cliff by the end of the 2024-25 fiscal year and therefore encouraged lawmakers to save more in the state’s Rainy Day Fund rather than initiate new programs the state will not be able to afford down the road.
“While Gov. Tom Wolf has proposed sending $2,000 to every citizen making less than $80,000 per year, none of the testifiers who were asked about this proposal felt it was the right thing to do, and in fact, many thought it would make the inflation situation even worse,” Causer said. “Of course, testifiers also agreed it’s time to stop paying able-bodied citizens to NOT work.”
The cost of energy was a frequent topic with testifiers indicating the Wolf administration’s insistence on entering into the Regional Greenhouse Gas Initiative (RGGI) will significantly exacerbate the high cost of fuel already cutting deeply into people’s household budgets.
To end the “war” on energy production, lawmakers should “free up fracking, encourage pipelines and exploration instead of banning them and cutting red tape for fossil fuel generation that’s actually reliable and affordable,” said Peter St. Onge, research fellow in economic policy at Heritage Foundation.
With gasoline and diesel fuel prices continuing to rise, consumers are less likely to travel, which will hurt many small businesses that rely on the tourism industry, said Greg Moreland, Pennsylvania state director for the National Federation of Independent Business.
“Commercially, the impact is greater. Pennsylvania is one of the most expensive states to fill up an 18-wheeler. If shipping costs increase, so will the price of goods that are being shipped,” he added.
At the conclusion of the two hearings, Causer said it’s clear that misguided and out-of-touch government policies are responsible for the damage being done to the nation’s economy, the state’s economy, employers and families.
“The inflation Americans are experiencing is the result mostly of expansive monetary and fiscal policy, rather than the result of global supply chain problems, supply shocks, corporate greed or other causes that are often suggested these days,” said Veronique de Rugy, George Gibbs chair in political economy and senior research fellow at the Mercatus Center at George Mason University. “Fiscal and monetary restraint are key to controlling inflation.”
Testimony and video of the June 8 and June 9 hearings is available online at www.PAGOPPolicy.com.
The committee will continue its examination of inflation in the coming weeks with hearings studying the impact of inflation on working people and their families (June 14) and long-term solutions to rising costs (June 21). Both hearings will begin at 9 a.m. and be streamed live at www.PAGOPPolicy.com.