State of the Union: You’re going to hear a lot about ‘shrinkflation’ and taxes during tonight’s speech

A significant chunk of President Joe Biden's State of the Union address this evening will be focused on “lowering costs” — issues such as drug prices, airline fees, and "shrinkflation" — as well as calls for higher taxes on corporate America and the richest Americans.

Biden is trying to highlight a range of different issues in the speech — before one of the largest audiences he will command before November's election — in the hopes of reversing sagging personal polls to show skeptical voters he is fighting for them.

The White House's focus has already been evident this week in a barrage of social media posts and a series of events leading up to Biden's 9 p.m. ET speech.

The remarks have included updates to Medicare drug price negotiations, news that the Consumer Financial Protection Bureau will cap credit card late fees at $8, and the announcement of a "strike force" to target corporations that the White House says are hiking prices illegally.

Read more: Credit card fees explained: 8 types you should know

Biden aides also rolled out new details about how the president will discuss taxes tonight.

On the business side, the president will call for raising the corporate tax rate to 28% and increasing the minimum corporate tax from 15% to 21%. He will also unveil a novel plan to crimp skyrocketing executive compensation by denying corporations a tax deduction when they pay over $1 million to any single employee.

Proposals focused on individual taxpayers include a renewal of Biden's call to require billionaires to pay at least 25% of their income in taxes and a push to increase the child tax credit.

"The president will also lay out his vision to make our tax code fairer and to lower the deficit by making big corporations and the wealthy pay their fair share," said Lael Brainard, the director of Biden's National Economic Council, in a preview of the State of the Union message.

WASHINGTON, DC - MARCH 5: President Joe Biden speaks during a meeting with his Competition Council in the State Dining Room of the White House on March 5, 2024 in Washington, DC. Biden announced new economic measures during the meeting. (Photo by Nathan Howard/Getty Images)
President Joe Biden speaks during a meeting with his Competition Council at the White House on March 5. (Nathan Howard/Getty Images) (Nathan Howard via Getty Images)

"This is an opportunity for the president to have the singular focus of 20 million plus Americans — who are likely pretty engaged if they're staying home on a Thursday night to watch the State of the Union — and to really tell his narrative," PIMCO's head of public policy, Libby Cantrill, said in a recent Yahoo Finance Live appearance.

What remains to be seen is whether any amount of time spent on subjects like hidden airline fees can move voters.

The administration has been trying to tout these themes for months and has found Americans resolutely focused elsewhere, with immigration recently becoming the top overall concern in polls.

A recent survey by the New York Times and Siena College also found Biden trailing Donald Trump and facing deep deficits on issues like his leadership and the nation's direction.

'Voters just want to hear that he gets it'

The White House will be pressing these themes, with President Biden headed to Philadelphia and Atlanta in the days after the speech and a wave of other travel and media appearances by cabinet officials.

The effort is designed to "reach Americans where they receive the news with the president's message about whose side he's on," said communications director Ben LaBolt.

Prescription drugs and those junk fees are set to receive prominent play.

WASHINGTON, DC - MARCH 06: Eight-feet-tall steel fencing is put up around the U.S. Capitol the day before President Joe Biden is to deliver the State of the Union address on March 06, 2024 in Washington, DC. The security fence has been erected during each of the president's annual addresses since the attacks of January 06, 2021.  (Photo by Chip Somodevilla/Getty Images)
Eight-foot-tall steel fencing was put up around the Capitol ahead of President Biden's State of the Union address. (Chip Somodevilla/Getty Images) (Chip Somodevilla via Getty Images)

The new "strike force on unfair and illegal pricing" announced Tuesday is also sure to be prominently mentioned. It will be co-chaired by the Justice Department and the Federal Trade Commission and be focused across an array of sectors from healthcare to groceries to housing to financial services.

"President Biden will highlight that lowering costs for working families is his top economic priority," said Brainard.

One figure on the left who sees an opportunity for Biden on these lesser-known issues is Evan Roth Smith. He's the head pollster of a left-leaning group called Blueprint Polling. He has been making this case in briefings directly to White House aides and Democrats more generally.

One of Blueprint’s recent polls found that 78% of respondents said they believed that investing in agricultural supply chains to reduce food prices would benefit them personally.

It was their top-performing issue, followed by other concerns like drug prices.

"Even though it seems sort of silly to say the president should go out and talk about agricultural subsidies to bring down food prices, voters just want to hear that he gets it and that he's doing something," he said.

A focus on corporate America

A clear component of this week's message is a tone that many are likely to take as anti-big business.

Much of the pressure will also be on "shrinkflation," the phenomenon where companies charge the same price for slightly smaller goods. It's been a prominent feature of Biden's message, down to a social media post reposting Sesame Street's Cookie Monster account on the issue.

A recent surge in merger activity is also likely to come up after a series of aggressive antitrust efforts from the administration in recent years.

Just this week, JetBlue Airways and Spirit Airlines scrapped a $3.8 billion merger agreement in the face of anti-competition concerns from the Biden administration.

Biden quickly touted the cancellation, saying that blocking the merger would save Americans money and give them more choices.

Biden himself has only made a few appearances this week after a long weekend at Camp David, where he worked on crafting the speech, which is expected to be revised all the way up until the president arrives on Capitol Hill tonight to speak to the assembled dignitaries.

Asked by reporters earlier this week, he offered little on his thinking, saying, "You’ll hear me on Thursday."

This post has been updated.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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