Legislation Document

WHEREAS, the State of Delaware is emerging from a two-year pandemic and while the state and country has undergone a historic economic recovery, national inflation has risen significantly meaning higher prices for groceries and gasoline for Delawareans; and

WHEREAS, although these inflationary factors are beyond our control in Delaware, residents have experienced a significant rise in prices for goods and services during the past year; and

WHEREAS, the Delaware General Assembly found it necessary to provide specific and immediate economic relief in the form of a rebate to residents of the State of Delaware known as the “2022 Delaware Relief Rebate Program” as a result of inflation; and

WHEREAS, rising inflation is the direct result of government stimulus, which significantly increased household income and demand at a time when labor markets and other business functions remain below their pre-pandemic strengths; and

WHEREAS, faced with an unprecedented pandemic and economic downturn in 2020, the federal government responded with an unprecedented fiscal and monetary response by authorizing $6 trillion in new spending as part of the American Rescue Plan , the Coronavirus Aid, Relief, and Economic Security (CARES) Act , and other legislation; and

WHEREAS, the Federal Reserve simultaneously purchased over $4 trillion of new assets to inject capital and liquidity into the market; in turn, federal debt rose substantially and is currently equal to the size of the economy, standing at almost 100% of the GDP; and

WHEREAS, over a year after the recession officially ended, Congress continues to pursue massive new government spending measures—including a $3.5 trillion budget resolution, the single largest spending package in history; and

WHEREAS, if high inflation persists, it will harm American families by decreasing their purchasing power and recent measures of consumer sentiment have also dropped significantly, with surveys showing that Americans are increasingly concerned about inflation; and

WHEREAS, the reopening of the economy after global COVID-19 shutdowns has generated temporary inflation in key consumer goods; producers are experiencing both shortages and rising costs for intermediate inputs, raw materials, and labor, which they are in turn passing on to consumers; and

WHEREAS, compounding the pressures of constrained supply, increases in household income from government stimulus measures has ignited more lasting demand-driven inflation; and

WHEREAS, if Congress continues to enact new government spending that further increases consumer demand while supply remains constrained, inflation could become worse; and

WHEREAS, Congress should therefore consider the inflationary risks of continuing its recent pattern of ballooning government spending and the American people would be better served by policies geared toward returning Americans to work and removing barriers to business investment in American workers.

NOW, THEREFORE:

BE IT RESOLVED by the Senate of the 151 ^st General Assembly of the State of Delaware, that we acknowledge the rise in national inflation and its negative impact on the citizens of Delaware.

BE IT FURTHER RESOLVED that the Senate acknowledges rising inflation is the direct result of government stimulus and massive new government spending measures and if Congress continues to enact new government spending that further increases consumer demand while supply remains constrained, inflation could become worse.

BE IT FURTHER RESOLVED that the Senate urges the federal government to reign in government spending and practice fiscal restraint just like every American is doing.