There are solutions to help Montanans deal with rising costs

Feb 08, 2022

Sidney Herald and Missoulian

While parts of our lives have gone back to a place that feels more normal, there is a long road ahead. COVID will continue to have a lasting impact. And while the stock market is holding strong for those with the financial means to invest, the economic pain is still real for many. Pandemic-related challenges and rising costs on basic needs like gas, housing, and groceries make balancing family budgets difficult.

The pandemic has had some surprising effects on our economy. While most stayed home and businesses shut down, people spent more on goods than services. The data show what we all experienced – we bought things to support local businesses, and we didn’t spend money on services like haircuts. Early on, some companies had to stop production or close plants, prompting worldwide supply and distribution bottlenecks that impacted nearly every country and many industries. To make matters worse, some companies chose to take advantage of the situation by raising prices while reporting record profits. Combining all these factors makes it easy to see how prices went up.

Economists say that COVID-caused inflation should slow down as the economy returns to a more balanced place. The most recent data shows that inflation is trending downward. While more data is needed to show long-term trends, this movement supports the idea that inflation will come down as supply-chain issues resolve and we get the virus under control.

However, people dealing with rising costs need help now. This is why Congress needs to act quickly.

As families struggle with higher prices, provisions in Build Back Better would give them extra support to make ends meet. As key policymakers continue to negotiate the details, these a few of the policy priorities they should move forward:

First, Congress should reauthorize recent improvements to the Child Tax Credit, which lapsed at the end of the year. Parents missed their monthly payment on January 15 because Congress let it expire. These payments are between $250 and $300 per child each month. That kind of money goes a long way.

Congress should make child care more affordable. Parents pay between $7,900 and $9,100 for child care, which is more than in-state college tuition. Many people cannot work without reliable and affordable child care.

We also have some solutions to address the housing crisis. Congress should increase housing vouchers and fund the construction of more affordable housing. Right now, Montana needs 17,000 more homes just to meet current demand.

In the near term, we must make it possible for people to afford to work, which will help our economy find a healthy balance. Build Back Better is a comprehensive bill to help deal with rising costs. We’ve already seen the benefit of the expanded Child Tax Credit, which has provided significant relief for 209,000 Montana families. More than 10,000 Montanans also received housing rental assistance, helping keep them in their homes. Build Back Better would extend these programs and bolster more so that Montanans can weather this challenging time.

Passing Build Back Better is expected to reduce inflation in the long term by creating jobs, making it easier for workers to keep those jobs, and expanding the economy’s capacity to produce goods and services.

During this economic uncertainty, our friends and neighbors need help making ends meet. Individuals cannot fix inflation, housing costs, or child care costs. But our government can act to make our lives easier while we wait for COVID to run its course — whenever that may be.

Rose Bender is Deputy Director of Research and a Senior Fiscal Policy Analyst with the Montana Budget & Policy Center — a nonprofit organization focused on research and advancement of public policies that help families living on low incomes.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.