Biden Says ‘No Surprise’ GDP Slowing, Urges Congress to Act on Energy, Taxes
(Bloomberg) -- President Joe Biden touted low unemployment, job creation and foreign investment as signs the US isn’t in a recession following disappointing economic data -- and urged Congress to pass legislation he said would counteract soaring inflation.
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Federal Reserve Chairman Jerome Powell “and many of the significant banking personnel and economists say we’re not in a recession,” Biden told reporters at the White House Thursday before ticking off the data points he said showed the strength of the US economy. He added: “That doesn’t sound like a recession to me.”
The president urged Congress to approve a broad tax, climate and health care deal Senate Democrats unveiled Wednesday, calling it “the strongest bill you can pass to lower inflation, cut the deficit, reduce health care costs, tackle the climate crisis and promote energy security.”
“Experts, even some experts who have criticized my administration in the past, agree that this bill will reduce inflationary pressures on the economy,” he said.
Biden’s comments were the latest White House effort to push back against Republican assertions the US has tipped into recession after data released Thursday showed gross domestic product has now contracted for two consecutive quarters, a scenario that’s referred to as a “technical recession.”
Traditionally in the US, the National Bureau of Economic Research determines when a recession officially has happened. The NBER committee that makes such a call doesn’t believe in “the two-quarter-declining GDP rule,” President and Chief Executive Officer James Poterba said via email after the data was released.
Three GOP senators, including Ted Cruz of Texas, hammered the message through a bit of political theater, proposing a resolution in the Senate “to affirm the historic definition of an economic recession.” The White House is seeking to “avoid bad headlines” and “rewrite the facts” they said in a statement.
Messaging Battle
“We are in a recession,” House GOP leader Kevin McCarthy said shortly after in a speech in the chamber. “This news is a grim milestone that points towards more hardship, more suffering, and more pain for the American people.”
The battle over economic messaging has heated up heading into November’s midterm elections, which could see Republicans take back control of Congress. While the White House has pointed to a robust job market as a sign of strength, Republicans have hammered Biden on inflation at a four-decade high.
“It’s no surprise that the economy is slowing” after the economy rebounded last year and the Federal Reserve raised interest rates, Biden said in a statement, but added that the country is “on the right path.”
At a Thursday afternoon meeting with economic aides and a group of chief executive officers -- included from Bank of America Corp, Marriott and Corning Inc. -- Biden acknowledged that Americans were downbeat about the state of the economy despite some positive indicators.
“I take it very seriously the confidence level of the American people in the economy, and they’re so down,” Biden said at the event. “There’s reason to be down.”
Biden urged lawmakers to swiftly pass the budget package that prominent Democratic senators announced Wednesday, which will encourage clean energy development and raise taxes on corporations. He called a provision that would direct the government to negotiate with drugmakers for lower prices on certain medicines a “god-send” for low-income families.
Policy Hopes
He also lauded House passage of Thursday of legislation that includes $52 billion in grants and incentives for domestic semiconductor manufacturing,
The budget deal has once again raised hopes that Biden will be able to enact one more major policy bill that may reverse sliding poll numbers and buoy Democrats’ chances in the midterms. It remains unclear if Democrats will be able to pass it. Senator Joe Manchin, who killed the previous effort, announced the package in an agreement with Majority Leader Chuck Schumer.
Powell said Wednesday that he doesn’t believe the US economy is in recession because of positive indicators, such as employment. Treasury Secretary Janet Yellen on Thursday also said the US is avoiding a recession, but is facing a slowdown that’s needed to ease inflation.
Yellen, speaking at the event with CEOs, reiterated the administration’s commitment to fight rising consumer prices.
“Inflation remains unacceptably high,” Yellen said, adding that it’s “our administration’s top priority to bring it down.”
(Adds details of Biden event with CEOs, starting in 11th paragraph)
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