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Biden on inflation: 'My top priority is getting prices under control'

President Joe Biden focused much of his State of the Union address Tuesday night on Russia's invasion of Ukraine, but he also wanted Americans to hear his message on surging inflation.

"One way to fight inflation is to drive down wages and make Americans poorer," he said as he attempted to reframe his domestic agenda. "I have a better plan to fight inflation: lower your costs, not your wages."

Biden delivered his optimistic economic message Tuesday to remind Americans of economic progress like the 6.6 million jobs added since he took office. But inflation concerns tempered that message.

"I get it," Biden said of inflation. "That’s why my top priority is getting prices under control."

The speech comes as Americans remain focused on both economic issues and Ukraine. A recent poll found almost 6 in 10 Americans say inflation has caused hardships; however, respondents were split on whether to blame Biden. Another poll found that more than half of respondents wrongly believe the United States is in a recession or depression despite the economic growth of the last year.

U.S. President Joe Biden delivers the State of the Union address during a joint session of Congress in the U.S. Capitol's House Chamber March 1, 2022 in Washington, DC, U.S. Jabin Botsford/Pool via REUTERS
President Joe Biden delivers the State of the Union address during a joint session of Congress in the U.S. Capitol on March 1. (Jabin Botsford/Pool via REUTERS)

In January, inflation reached a 40-year high with the Consumer Price Index registering a 7.5% annual gain and prices rising among a wide range of everyday goods Americans need to survive.

A 4-point plan

Biden outlined a four-point plan to fight inflation on Tuesday night. The bullet points included strengthening supply chains; reducing costs through government action; taking on corporate consolidation; and encouraging workers to find better jobs by providing resources like retraining.

In addition to those fiscal policy levers, Biden also needs the Senate to approve his five nominees for the Federal Reserve, the White House has stressed. The Senate Banking, Housing, and Urban Affairs committee is in the middle of a standoff with Republicans who boycotted a vote earlier this month over Sarah Bloom Raskin, a former Obama financial regulator who's been accused of championing policies that would hurt energy producers. Senate Republicans suggest they may block her again this week.

Speaking of his inflation plans, Biden said: "While you’re at it, confirm my nominees to the Federal Reserve, which plays a critical role in fighting inflation."

In his speech, Biden touted the efforts from the Bipartisan Infrastructure law that he says will ease price pressures. "Economists call it 'increasing the productive capacity of our economy.' I call it building a better America," he said. "My plan to fight inflation will lower your costs and lower the deficit."

The president also argued for a range of provisions from his still stalled Build Back Better plan in areas like prescription drugs, child care costs, paid leave, and energy costs.

The president also made a strong the case for another other bill to tackle inflation Tuesday night: one currently working its way through the Congress focused on China, supply chains, and the semiconductor industry that officials have said would have a "direct correlation" with inflation.

He said Intel (INTC) wants to increase its investment in a new plant in Ohio from $20 billion to $100 billion. But that will only happen if the bill passes, the president cautioned. "That would be one of the biggest investments in manufacturing in American history and all they’re waiting for is for you to pass this bill," he told the assembled lawmakers.

'Inflation is some of the collateral damage'

The president also focused on corporate consolidation and its arguable effects on price increases. The White House has tried to spotlight antitrust issues for months in areas like the meat and energy industries as one cause of inflation.

Ocean shipping was another focus Tuesday night. Bharat Ramamurti, the National Economic Council Deputy Director, said in a Yahoo Finance Live interview Tuesday that some transport costs spiked 1000% in recent months.

"Those price increases filter their way through: they hurt American businesses and they hurt American consumers," he said.

The White House is optimistic that bipartisan legislation on the issue could also come soon to address some of the competitive issues in shipping and other industries.

A sign is seen on security fencing surrounding the US Capitol grounds in Washington, DC, on February 28, 2022, ahead of tomorrow's State of the Union speech by US President Joe Biden. - Embroiled in the most severe US-Russia crisis since the Cold War, President Joe Biden will take on a no less difficult domestic challenge during his State of the Union address: restoring Americans' optimism. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
In addition to Ukraine and inflation worries, officials are also worried about protests and have erected security fencing surrounding the Capitol grounds ahead the State of the Union speech. (NICHOLAS KAMM/AFP via Getty Images)

Many progressive Democrats have also begun to charge corporate America with "widespread" price-gouging, pointing to surging corporate profit margins. However, the White House has not been echoing the charge.

Cecilia Rouse, chair of Biden’s Council of Economic Advisers, offered on Monday during an event hosted by Politico that Biden's policies helped avert a double dip recession and “yes, we’ve got some inflation and I’m not trying to minimize that.”

Inflation has been widespread around the world, she noted. “This pandemic has just been a catastrophic shock to our economic systems and our whole world," she said, "and the inflation is some of the collateral damage.”

This story has been updated with comments from Biden's address.

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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