Biden says his economic agenda is working. The public is skeptical.

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WASHINGTON — President Joe Biden made the case Tuesday that his economic plan is working despite predictions of a recession by economists, a looming battle over the nation’s debt repayments, and a nation that feels like it’s in a shaky economy.

The economy played a prominent role in Biden’s State of the Union address with a message aimed primarily at low- and middle-income Americans as he championed boosting manufacturing jobs and buying more American-made goods. Joined. He proposed raising taxes on corporations and the wealthiest Americans to help finance programs to reduce the costs of health care and child care.

“For decades, too many people have been left behind and treated as if they were invisible. Maybe you are the one watching from home,” Biden said. «Remember the jobs that disappeared? You remember them, don’t you? People back home remember that. You wondered if there was still a way for your kids to get by without having to move. Well, I get it. That’s why we’re building an economy where no one is left behind. Jobs are coming back. Pride is coming back.»

Biden was defending his administration’s handling of the economy to a largely skeptical audience. After being hit by decades-high inflation for more than a year, consumer confidence remains low by historical standards, with two-thirds of consumers saying they expect an economic recession this year, according to the latest report from the University of Michigan. consumer opinion survey.

in a separate Gallup poll published Monday, more than two-thirds of respondents said they expect inflation to rise, nearly half said they expect the market to fall in the first half of 2023, and 3 in 4 said they were planning interest rates to they kept going up. Voters have cast their economic pessimism on Biden, with 61% saying in an NBC News poll last month that they disapproved of his handling of the economy.

“In a sense, you have a labor market that is quite strong and stable. We certainly see strong consumer spending, which is another measure of sentiment, and yet clearly high prices have been something that has really been a gale force that many consumers have had to deal with for over a year now.» Joe said. Davis, the global chief economist at investment firm Vanguard.

Biden outlined the progress he said his administration has made by passing laws to stimulate investment in semiconductor manufacturing and clean energy technology and to rebuild the country’s infrastructure.

“Let’s see the results,” Biden said. “We’re not done yet by any stretch of the imagination, but the unemployment rate is at 3.4%, a near 50-year record unemployment for Black and Hispanic workers. We have already created, with your help, 800,000 good-paying manufacturing jobs, the fastest growth in 40 years.”

Biden called on Congress to do more to lower costs for Americans by capping the price of insulin, restoring the child tax credit and improving access to affordable housing.

To pay for those efforts, Biden proposed closing tax loopholes and raising taxes on the wealthiest Americans as well as corporations, including quadrupling the corporate stock buyback tax, which companies use to boost their share prices. .

“I am a capitalist, but pay your fair share,” Biden said. «I think a lot of you back home agree with me and a lot of people that, you know, the tax system is not fair. It’s not fair.»

Biden acknowledged the price pressures Americans have been under, but tried to highlight the progress that has been made in reducing inflation.

“We are better positioned than any country on Earth right now, but we have more to do,” Biden said. “But here at home inflation is coming down, here at home gas prices are down $1.50 from their peak, food inflation is coming down, not fast enough, but it’s coming down. Inflation has fallen every month for the past six months, while take-home pay has risen.»

Ahead of the speech, outgoing White House economic adviser Brian Deese said Biden’s remarks intended to convey that while there is more work to be done, the progress so far should make Americans optimistic about the way forward for the economy.

“The president uniquely understands that we have a lot more work to do when it comes to the economy,” Deese said at a White House briefing on Monday. «And that while we’ve seen real progress and a reduction in inflation, in the last six months in particular, we’ve got more work to do to bring prices down, bring costs down and create breathing space, as he says, for American families.» . .”

Biden stands little chance of getting any of his economic policy proposals through a divided Congress as Republicans have tried to blame him for inflation and rising debt.

Economists have said a number of factors have contributed to inflation in the past two years, including Russia’s invasion of Ukraine, supply chain disruptions from the coronavirus pandemic, low interest rates and changes in the consumer spending. various economic studies They also found that the Covid stimulus bill that Biden pushed through in his first year in office also contributed to inflation, though they’re split on how much.

Republicans have been threatening to block legislation to raise the debt ceiling, which the federal government must do to keep paying its bills, unless Democrats agree to budget cuts to reduce the deficit.

Biden said his budget for the next fiscal year would reduce the deficit by an additional $2 trillion, in part by raising taxes on corporations and individuals earning more than $400,000.

When Biden accused Republicans of threatening to cut Medicare and Social Security to reduce public spending, Republicans greeted him with boos. Biden seized the moment to rule out the possibility of such cuts in negotiations.

“As we all seem to agree, Social Security and Medicare are now off the books,” Biden said. «Okay, we are unanimous.»

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