White House announces steps to lower everyday costs alongside new inflation report
The White House is highlighting new efforts to lower Americans' everyday costs, as the latest Consumer Price Index showed signs that the temperature is dropping.
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On Tuesday, the White House is highlighting new efforts to lower Americans' everyday costs, just as the latest Consumer Price Index (a key marker for inflation) showed signs that the temperature is dropping.
The new steps, the result of funding through legislative efforts signed into law by President Joe Biden since taking office, are aimed at lowering out-of-pocket costs and broadening concerns about the economy and the possibility of a recession. A White House official detailing the new measures to CNN said they are aimed at lowering the price of health care, home heating, and broadband access, adding that they will impact 'tens of millions of seniors, students, and families month-over-month.'
Inflation remains elevated but is coming down, according to the latest CPI data released Tuesday morning. Annual price increases continued to slow in February, with CPI measuring 6% for the year ended in February. This is down from January's 6.4% and in line with economists' expectations.
This week, the Federal Communications Commission will release additional funds to support the Affordable Connectivity Program, according to an official. The program helps deliver affordable broadband to over 16 million households and is a provision of the bipartisan infrastructure law. It provides eligible households a $30 monthly credit toward the cost of their internet service plan, or a $75 monthly credit for households living on Tribal land.
The Department of Health and Human Services is releasing over half a billion dollars in Low Income Home Energy Assistance Program funds to states to cover American families' home heating costs. The Biden administration announced the distribution of $4.5 billion in federal assistance to help lower many Americans' heating bills through the program, which received an additional half a billion in funding through the infrastructure law. According to the official, the program 'has helped over 5.3 million households on heating and cooling bills, and on weatherization services' over the past year.
The department has also announced new details on which Medicare Part B drugs, expensive medications administered by doctors, hiked their prices faster than inflation since the Inflation Reduction Act went into effect. These drugs will be subject to inflation rebates for excessive price increases, and some beneficiaries will start seeing lower copays next month, the official said.
HHS will also release new data showing how many seniors and people with disabilities are likely to have started seeing cost-savings on free recommended vaccines because of a provision of the Inflation Reduction Act that went into effect in January. This provision requires drug companies to give Medicare the same discounts on vaccines that they give to Medicaid.
Although the most recent CPI data showed that inflation is slowing down, people are still concerned that the US economy might enter a recession. These concerns were heightened recently by a jobs report that was better than expected, and by the second-largest failure of a financial institution in US history.
The Fed has enacted a series of interest rate hikes over the past year in order to reduce demand and lower historically high inflation rates.
However, February's net job gains were more than what economists had estimated for a less eventful month and showed that there was opposition to the Federal Reserve's interest rate hikes.
In the aftermath of the collapse of Silicon Valley Bank, which provided financing for almost half of US venture-backed technology and health care companies, the Fed's campaign has come under scrutiny.
The collapse of Silicon Valley Bank late last week was at least partially due to the recent rate hikes. These higher borrowing costs put a strain on the tech industry which SVB serves, and also caused the value of Treasury bonds to go down. These bonds are a crucial source of capital for banks.
But Sheila Bair, the former chair of the Federal Deposit Insurance Corporation, told CNN on Sunday that a hike of that size would not be 'well advised' given the bank's collapse. Similarly, Goldman Sachs told clients late Sunday that 'in light of the stress in the banking system,' the bank no longer expects the Federal Reserve to deliver a rate hike next week.
Biden sought to reassure Americans on Monday, outlining his administration's plans to protect small businesses and workers in the wake of recent bank shutdowns. These actions include guaranteeing depositors' funds at SVB and Signature Bank, making it clear that taxpayers are not liable for these measures, declining to extend relief to investors of SVB, and holding those responsible accountable.
'Americans can rest assured that our banking system is safe. Your deposits are safe,' Biden said on Monday. 'Let me also assure you we will not stop at this. We will do whatever is needed on top of all this.'