White House and GOP agree: This is the Biden economy
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President Biden faces the uphill battle of convincing voters that the U.S. economy is not only strong but slowly improving as Republicans aggressively reject the idea.
The White House has spent the last year digging itself out of a host of economic setbacks— from sky high interest rates that have kept people from buying homes and cars to gas prices that hit historic highs— that has left many voters feeling worse off financially.
But with inflation falling this week to the lowest rate since March 2021 and the Federal Reserve opting to keep interest rates unchanged for the first time since January 2022, the Biden campaign is readying to convince Americans that they are better off now than they were four years ago.
“Democrats writ large often say one thing about the economy and then they move on. They move on to health care, they move on to any other also important issue. What we need to be doing is be relentless about the economy. We need to talk until we are blue in the face, until we sound like we’re repeating [points] 500 times,” said Gabe Horwitz, senior vice president of the economic program at Third Way.
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The labor market has been a major selling point for the president, with unemployment down around 3.7 percent and millions of jobs added under his tenure. When inflation was still higher than normal and interest rates were on the rise, the White House would often point to jobs as a reason to prove the U.S. was not headed for a recession.
Just in time, however, for administration officials to fan out across the country later this month to tout the president’s economic agenda, inflation dropped sharply in May, with consumer prices rising just 0.1 percent.
The second installment of the “Investing in America tour” this summer will involve Cabinet members and more than a dozen officials traveling to over 20 states, highlighting “the Republicans who to this day continue to try to overturn it and send good jobs and factories overseas,” according to a White House official.
Josh Bivens, research director at the Economic Policy Institute, a left-leaning think tank, said Team Biden has a strong case to share on the trail because the jobs market in particular is “the best labor market in generations.”
“I think the case is really strong. People hate inflation, and the media has talked a ton about inflation. That has been dominating their perception of the economy for a couple of years. But my guess is, unless something really changes, the inflation normalizing in the face of still strong labor markets—I think that’s a really good record they should be able to run on,” he said.
Republicans have used the economy for a case against Biden throughout his presidency to rally their base against Democrats. The party focused on it during the 2022 midterms, pointing to higher-than-normal gas prices and the steep cost of groceries.
The House Ways and Means Committee cleared legislation this week to help workers and small businesses “navigate price spikes, worker shortages, and supply chain failures in President Biden’s economy,” according to the committee.
“Main Street has struggled in the Biden economy. We’ve heard directly from small businesses during our hearings around the country about the real challenges they face today. Their testimony exposed the painful reality that the economy under President Biden is harming small businesses,” Chairman Jason Smith (R-Mo.) said in a statement.
The White House, meanwhile, points to other parts of their agenda to make the argument that their economic plan is working, from protecting Social Security and Medicare to avoiding the first-ever national default.
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Biden’s success in negotiating the debt limit bill with Speaker Kevin McCarthy (R-Calif.) could lead to support from swing-state voters who want to see fiscal responsibility from the White House, argued Horwitz.
“Between what he was able to accomplish in the Inflation Reduction Act and what he was able to accomplish in a bipartisan manner on the debt limit bill, Biden showed that he cares about fiscal responsibility, and we know that voters are very sensitive to that, especially swing voters,” said Horwitz, a former appropriations and budget staff for House Democrats.
Biden is set to rally with union workers on Saturday in Philadelphia, which comes after he received a slew of union endorsements on Friday.
On what his message will be at the rally, Biden said, “Every major labor union in the country is endorsing me tomorrow. And I’m saying that my philosophy about building from the middle out and the bottom up is working.”
President Joe Biden speaks at a political rally at the Philadelphia Convention Center in Philadelphia, Saturday, June 17, 2023. (AP Photo/Manuel Balce Ceneta)
He has been working to shore up those endorsements and solidify support from blue collar workers, many of whom connected with former President Trump’s messaging in the 2016 election. The campaign’s union endorsements this month put wind behind the president’s back on the campaign trail, experts say.
“There’s tons of workers out there in the U.S. economy who don’t have a four-year college degree and make pretty modest amounts of money. It’s a big voting bloc, and they have — for the past couple of decades — not been served well at all by the economy,” Bivens said.
“If you’ve got a bunch of unions appreciating the strides and the labor market and the effect that has on low-and-moderate wage workers, you would think that would pay dividends, electorally.”
There are early signs of Americans overall feeling better about the economy and more confident in its trajectory.
The closely watched University of Michigan survey of consumers showed a sharp jump in U.S. satisfaction with the economy this month, according to data released Friday.
Consumer sentiment rose 8 percent from May and a whopping 28 percent from a record low set last year. Americans also expect inflation to keep falling throughout the year and settle close to pre-pandemic levels.
Joanne Hsu, director of the Michigan survey of consumer, said the jump reflects “greater optimism as inflation eased and policymakers resolved the debt ceiling crisis.”
Even so, Hsu warned, “sentiment remains low by historical standards” and American households are bracing for their incomes to decline.
“A majority of consumers still expect difficult times in the economy over the next year,” Hsu said.
To ward off any worries about the economy and questions over if another downturn is possible, the White House is working to push out the positive strides the economy has experienced recently.
Press secretary Karine Jean-Pierre kicked off a daily briefing this week with a graphic showing inflation falling, calling the data “evidence that the president’s economic plan is working.”
And the president has been pushing out his messaging on the economy ahead of campaign season heating up.
“We have taken action to bring down the cost of gas at the pump, prescription drugs, and health insurance premiums,” Biden said in a statement this week. “While there is more work to do, the plan that I laid out a year ago to bring down the cost of living and sustain stable and steady growth is working.”
—Sylvan Lane contributed to this report.
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