(Bloomberg) — Senate Republican Leader Mitch McConnell said the US is likely to tip into a recession as the Federal Reserve raises interest rates to combat historic inflation, which he blamed on Democrats’ spending.
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McConnell said the answer for the economy is greater fiscal austerity and that Republicans will serve as a check on any big spending plans by President Joe Biden if they win one or both chambers of Congress in November’s midterm elections.
The Kentucky Republican pointed to Democrats’ nearly $2 trillion Covid relief package last year as the driver behind price surges, which he said are “likely to lead next to a recession, because the Fed will end up raising interest rates.”
The central bank is raising interest rates rapidly to curb the hottest price pressures in 40 years. US consumer prices rose 8.5% in the 12 months through July, according to Labor Department data.
“If the American people decide they want to go in a different direction this fall, I can assure you that a Republican House and Senate or House or Senate, will not be interested in passing any more of these mass spending bills, which have created the calamity that we find ourselves in,” McConnell said at a news conference in Louisville, Kentucky.
McConnell said he would be open to more modest bipartisan bills, noting laws he recently supported, including legislation on postal reform, infrastructure and school safety and mental health.
Asked the potential for federal help for child care, McConnell said state governments are “awash in money” and could tackle the issue if they choose to do so.
“I don’t think we need to do any more spending at the federal level,” he said.
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