Republican members of the Congressional Joint Economic Committee issued a report with policy recommendations to reduce inflation and help spur economic growth.
“Persistent inflation poses a significant challenge, and stagnating growth puts our economic health at risk. Many of the nation’s current economic challenges—including slow growth, decreased investment, softening goods spending, and low consumer confidence—can be explained by high and persistent inflation rates, and it is imperative for policymakers to prioritize inflation reduction moving forward,” JEC Republicans wrote in the report, Policy Solutions to Reduce Inflation.
Among the recommendations, JEC Republicans, led by ranking member Sen. Mike Lee (R-UT), said Congress should implement supply-side policy reforms that complement the Federal Reserve’s attempts to cool demand through monetary tightening.
Further, the lawmakers said that reducing government spending would tamp down on demand-fueled inflation while helping the federal government pay down the debt and thus control inflation expectations.
In addition, the JEC Republicans said that removing barriers to work through occupational licensing reform, increasing work flexibility, and mitigating work disincentives in tax and transfer programs would increase labor force participation. That would have the effect of reducing the cost of production for firms.
Other recommendations include the deregulation of energy, housing, and other markets to reduce the regulatory burden on businesses while lowering the cost of domestic production and bringing down prices. They also called for removing barriers to international supply by reducing tariffs and eliminating regulations like the Jones Act and Foreign Dredge Act to provide consumers with access to cheaper goods while increasing the resiliency of supply chains.
“As the Federal Reserve continues on the path of monetary tightening to reduce demand, Congress should do its part by practicing fiscal discipline and pursuing policy reforms to expand supply,” the lawmakers stated in the report.