President Joe Biden faced a number of problems during his first State of the Union Address on March 1, from the ongoing COVID-19 pandemic to the Russian invasion of Ukraine. But the president said his “top priority” was getting inflation under control.
Consumer prices jumped 7.5% a year in January, the highest inflation rate in 40 years and well above the Federal Reserve’s 2% target. As a result, “many families are living paycheck to paycheck, struggling to meet the rising cost of food, gas, housing and more,” Biden said.
During his speech, Biden unveiled a comprehensive economic plan to fight inflation by cutting the cost of prescription drugs, child care and energy without lowering American wages. He also relied on tax reform to fund his policies and “ensure that corporations and the wealthiest Americans start paying their fair share.”
“My plan to fight inflation will reduce your costs and reduce the deficit.”
Keep reading to learn more about the president’s plan to tackle rising consumer prices, as well as how you can lessen the impact of inflation on your finances. You can visit Credible to compare interest rates on a variety of financial products, from savings accounts to debt consolidation loans.
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Amid inflation, Biden touts economic plan to cut day-to-day costs
The president used his State of the Union address as a platform to push forward his economic agenda, saying his plan would lower the prices of energy, child care and prescription drugs. Here’s how the Biden administration plans to cut those costs:
Biden has advocated for doubling America’s clean energy production, lowering the price of electric vehicles (EVs) and offering tax credits to cool homes and businesses. He estimates that his climate change plan would reduce a family’s energy costs by an average of $500 per year.
The bipartisan $1 trillion infrastructure bill passed by Congress in 2021 will support Biden’s goal of installing 500,000 electric vehicle charging points by 2030. The Build Back Better Act, which n has so far not garnered enough support in the Senate, would increase the amount of the tax credit for electric vehicles. at $12,500.
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Biden’s Build Back Better plan would cap the cost of child care at 7% of a family’s household income and provide universal pre-K for every child ages 3 and 4. In addition, it would extend the expanded child tax credit and monthly payments. A recent study estimates that this would permanently reduce child poverty.
“My plan will cut costs in half for most families and help parents, including millions of women, who have left the workforce during the pandemic because they couldn’t afford child care. , to be able to go back to work,” Biden said.
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Biden suggested lawmakers should cap the cost of insulin at $35 per month and let Medicare negotiate lower prices for prescription drugs. He also wants to make permanent some changes to the U.S. bailout — that legislation cut monthly health insurance premiums, increased tax credits and expanded financial assistance for Affordable Care Act policyholders.
Data shows that medical debt is the leading cause of bankruptcy. If you’re struggling with unpaid medical bills, you might consider getting a debt consolidation loan to help pay off your debt and save money over time. You can visit Credible to compare debt consolidation loan rates for free without affecting your credit score.
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Fed plays ‘essential role’ in fighting inflation, plans rate hikes
While the President outlined his strategy for stabilizing consumer prices during his State of the Union address, he said the Federal Reserve “plays a critical role in fighting inflation” through the through its economic policy.
While the Fed has kept the benchmark rate near zero to stimulate the domestic economy during the coronavirus pandemic, it plans to implement several rate hikes in 2022 to dampen inflation. The central bank still plans to raise interest rates later in March, Fed Chairman Jerome Powell told lawmakers on Wednesday.
The announcement of impending Fed rate hikes has already caused interest rates to rise on a number of financial products, including mortgages. Average 30-year mortgage rates have fallen from around 3% in November 2021 to almost 4% currently, based on Freddie Mac.
The Fed’s economic policy will also likely cause interest rates to rise on other consumer debt products, such as credit cards. It comes at a time when Americans are increasing their credit card debt at a record pace, the data shows.
One way to combat rising inflation rates is to refinance your high-interest debt at a lower rate. For example, consolidating credit card debt with a fixed rate personal loan can save some borrowers thousands of dollars over time.
You can learn more about credit card consolidation and compare offers that suit your needs by visiting Credible.
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