May 20 (UPI) — Cecilia Rouse, chair of the White House Council of Economic Advisers, said Friday that gasoline and food prices that are fueling inflationary pressure in the United States are global issues.
Rouse and Gene Sperling, coordinator of the White House American Rescue Plan joined in a virtual discussion on the economy during a live-streamed talk sponsored by the Center for American Progress Friday.
Rouse said Russia’s invasion of Ukraine in February kicked off a crisis that was already set in movement from the COVID-19 pandemic. The two have created challenges in the energy and food sectors at home and abroad.
She said that while the world rightly sanctioned various government sectors of Russia for their aggression in Ukraine, all of those things have had an effect on inflation.
“Russia’s unprovoked invasion and the war on Ukraine has disrupted energy markets and it has disrupted food markets,” Rouse said. “Those are the two big challenges that it poses to the United States and to the world. The United States is less dependent on Russian oil than many other countries around the world. But oil and other sources of energy are traded on a global market.”
Rouse blamed the continuing dramatic increases in gasoline prices on the war and adjustments being made to it, such as refining capacity.
“As we put sanctions on the Russian banks, etc., the oil markets have adjusted,” Rouse said. “We know that the price of oil has really skyrocketed, and it has had some consequences for the supply of oil in terms of our refinery capacity.
“That has all that is largely the reason why we’ve seen the spike in oil prices over the last two to three months. So that is a headwind that we see that we are certainly facing.”
She said Biden has been partnering with other countries to alleviate bottlenecks in the energy sector as well as release oil at historic levels from the Strategic Petroleum Reserve. Rouse said oil companies have not operated at capacity since the start of the pandemic but Biden had been encouraging them to do so by using drilling leasing currently available to them.
“The United States is a net exporter of agricultural products but again, many of those prices are set on the global market,” Rouse said. “[Biden] has been working within our agricultural sector to provide ways to help farmers increase the number of crops with double insurance for double cropping, finding ways for them to lower costs in terms of fertilizers and make it more efficient for them to do so.”
While some Republicans have blamed the American Rescue Plan for the country’s inflation woes, Sperling said he believes the infusion of money into the economy helped prevent a double-dip recession and has put the United States currently in a stronger position than other economies around the world.
A former Obama administrator, Sperling said those lessons then helped push Biden to create a plan that would give the United States a lasting recovery that could withstand the current inflation woes and even a resurgence of the coronavirus.
Sperling previously served as director of the National Economic Council and National Economic Advisor to both former President Barack Obama from 2011 to 2014, and President Bill Clinton from 1997 to 2000.