Washington (AFP) – President Joe Biden and his administration did their best Thursday to play down a disturbing new economic report. That added to the evidence of the recession, in an attempt to draw focus instead to significant legislative advances on measures to tame inflation, reduce debt, and preserve America’s competitive advantage.
The desire to highlight the positive reflects the political tensions that already began in the run-up to the midterm elections. Republican lawmakers are sounding the alarm that the downturn has already begun, a claim contested by Biden and his fellow Democrats who wanted the public to focus instead on a pair of potential congressional victories.
Thursday reflected the ongoing push and pull set by the Biden administration, where a setback can overshadow any victory and the news cycle moves faster than periods of victory. This gave rise to dueling narratives about where the country was.
Republicans said the report showing the economy contracting for the second consecutive quarter was evidence of a “Biden slump” at a time when inflation is at its highest level in four decades.
In turn, Biden pointed to a record low unemployment rate and signs of continued business investment in the economy. He declared, “That doesn’t sound like a slump to me.”
The president celebrated Congress’ approval of a bipartisan $280 billion package to boost the US semiconductor industry And the sudden resurrection of the Democrats’ proposal only To cut prescription drug costs, tackle climate change, fund the IRS, set a minimum corporate tax and cut the deficit.
Other White House officials took Biden’s caution and ignored the GDP report showing that the economy contracted at an annualized rate of 0.9%.
Brian Dees, director of the White House National Economic Council, told The Associated Press when asked about the troubling GDP report. “This is our focus.”
At a rare news conference, Treasury Secretary Janet Yellen allowed that Americans are primarily concerned about inflation, not the discrepancy between Democrats and Republicans over whether the GDP report shows the economy has slipped into recession.
“We should avoid a semantic battle,” Yellen told reporters, adding that Americans’ “biggest concern is inflation” and that they are generally satisfied with their ability to find a job and stay in business.
However, the treasury secretary posted some rhetoric of her own saying growth was “slowing,” when the GDP report showed the economy had shrunk in size over the past six months.
The final verdict on whether the country is in recession or not It is the National Bureau of Economic Research, which may not make its decision for some time.
Yellen portrayed the slowdown as positive for an economy returning to normal after the pandemic, in contrast to the Republicans’ argument that it was an unabashed failure caused by Democratic politics rather than a complex global attempt to get out of the coronavirus pandemic.
That debate has moved into the semiconductor bill now awaiting Biden’s signature and new climate and drug-pricing legislation Democrats have dubbed the “Inflation Reduction Act of 2022.” The administration says both projects will combat inflation, while Republican opponents argue that they will push prices higher.
“The government announced this morning what every American has been feeling for nearly a year – we’re in a recession,” House Minority Leader Kevin McCarthy said in a speech. Democrats’ spending caused this inflation. And now, they’re doubling down on the same failed strategy.”
Other Republicans moved quickly to take advantage of the report, with the Republican National Committee declaring it an indication of a “Biden slump.”
Even the White House acknowledges that the legislative proposals will not have an immediate impact on consumer prices or economic output, but believes voters will reward Biden and Democrats because they are seen as proposing solutions to challenges affecting household bottom lines.
Biden told the Associated Press in an interview earlier this year that he sees his mission as giving Americans a renewed sense of confidence, and yet the faith he seeks to preserve and spread is constantly eroding as the losses linger in people’s memory and gains. Easily forgotten.
Even if the recession in the United States is an open question for economists, the question of the health of the economy is largely settled among voters.
Nearly 8 in 10 Americans describe the US economy as poor and about 7 in 10 reject Biden’s economic leadership, according to a June survey by the AP-NORC Center for Public Affairs Research. Consumer sentiment as measured by the University of Michigan has begun to decline as inflation continues to be a threat, with confidence relatively weak among Democrats.
The Federal Reserve, which on Wednesday moved sharply to raise interest rates to further slow the economy in an attempt to bring down inflation, signaled more increases were on the horizon in a sign that the fight against inflation – and the political skirmishes that ensued – could continue until this November’s elections. general.
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