Supply chain issues could stretch into 2022, Buttigieg warns
News (NewsNation Now) — The supply chain issues that are hindering the U.S. economy could likely stretch into 2022, Secretary of Transportation Pete Buttigieg said.
“Certainly a lot of the challenges that we’ve been experiencing this year will continue into next year,” Buttigieg said in a Sunday appearance on CNN. “Look, part of what is happening isn’t just the supply side, it’s the demand side. Demand is off the charts. Retail sales are through the roof.”
In an economy upended by the coronavirus pandemic, shortages and price spikes have hit everything from lumber to computer chips to toilet paper.
The Biden administration is brokering new deals in an effort to relieve the stressed supply chain, ease shipping backlogs and move stranded container ships that are driving prices higher for consumers off the U.S. coast.
President Joe Biden last week announced that the port of Los Angeles would begin operating 24/7 to help supply chain bottlenecks.
“This is a big first step to speed up the delivery of goods across all America,” Biden said.
Ports in Los Angeles and Long Beach, California, account for 40% of all shipping containers entering the U.S. The port of Los Angeles remained bottlenecked Monday morning.
“If you think about those images of ships, for example, waiting at anchor on the West Coast – every one of those ships is full of record amounts of goods that Americans are buying because demand is up because income is up because the president has successfully guided this economy out of the teeth of a terrifying recession,” Buttigieg said Sunday.
Buttigieg pushed the passage of Biden’s hotly contested $3.5 trillion infrastructure bill, saying the bill would help ease supply chain issues.
“There are $17 billion in the president’s infrastructure plan for ports alone,” Buttigieg said on CNN’s “State of the Union.” And we need to deal with the long-term issues that have made us vulnerable to these kinds of bottlenecks when there are demand fluctuations, shocks and disruptions like the ones that have been caused by the pandemic.”
Republican lawmakers have blasted Biden’s $1.9 trillion coronavirus relief package, which passed in March, for fueling higher prices. A recent analysis issued by the investment bank Goldman Sachs estimates that “supply-constrained goods” account for 80% of this year’s inflation overshoot, yet the political criticism continues to sting as housing and oil prices add to inflationary pressures.
Senate Republican Leader Mitch McConnell has made inflation one of his central criticisms of Biden, a sign that getting prices under control could be essential for Democrats trying to hold onto congressional seats in next year’s elections.
“The Democrats’ inflation is so bad that even though the average American worker has gotten a multiple-percentage-point pay raise over the last year, their actual purchasing power has been cut,” McConnell said in a Senate floor speech last week. “Even dollar stores are having to raise their prices.”
This comes as U.S. Postal Service, FedEx and UPS released recommended shipping dates to ensure that gifts and cards arrive in time for the holidays. Retailers have recommended that consumers shop early or risk not finding what they want for Christmas, which falls on a Saturday this year.
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