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Biden and Democrats finally have a few things going their way

Yahoo Finance's Rick Newman discusses the CHIPS Act passing, the Inflation Reduction Act, and other good news for President Biden's approval rating.

Video Transcript

[MUSIC PLAYING]

AKIKO FUJITA: It has been a big week for President Biden as he nears key legislation on bolstering the semiconductor industry and an updated version of his Build Back Better plan. Let's bring in Yahoo Finance's Rick Newman for his calls of the week. Bidenomics. Democrats return back from the dead, although you could argue that the GDP print that came out yesterday kind of dampened the party, right?

RICK NEWMAN: Sure. But I'm not sure that's going to hurt Biden or the Democrats very much. We talked about this yesterday. Americans don't think of GDP the way they think about the price of gas or the price of food or their job security. So the labor market still remains strong, and gas prices are coming down, so that's good for Biden. We've been basically ripping on Biden for months because everything's kind of been going against him. And suddenly out of the blue, I didn't see this coming, I don't think very many people did see this coming, a really good week for Democrats and for President Biden as well.

First, the CHIPS Act, which you mentioned, Congress has now passed that. Biden is going to sign it. It could be today or over the weekend. And then this total surprise, the so-called Inflation Reduction Act, which includes some of the green energy provisions from Biden's Build Back Better legislation last year, but none of the social welfare items that Biden wanted in there.

This actually-- this is only going to get support from Democrats, and it's not 100% sure it's going to pass yet. But this is actually what you could describe as a fairly centrist bill because in addition to the green energy incentives, which would be the most Congress has ever done to push green energy, the bill would say the executive branch needs to speed up approval of natural gas pipelines and other types of fossil fuel infrastructure, and also clarifying speed up permitting for oil and gas drilling leases.

So there's something in there for the fossil fuel industry, which is the energy we have today. And there's a lot in there for solar, wind, and other types of renewables, which is the energy of tomorrow. If it passes, pretty good, considering that it looked like Democrats weren't going to get much of anything done just a couple of weeks ago.

BRIAN CHEUNG: Rick, let's talk about the politicking here, right, because this is also coming at a time and a week when you saw President Trump and former president-- Vice President Mike Pence down in DC making speeches of their own. They're trying to get ready for perhaps 2024. Do you think that what happened this week with the win, I guess, for the Democrats on this bill is going to move the needle on the approval rating of Biden for the Democrats in the next election?

RICK NEWMAN: I do. I think-- in fact, if you get out a microscope and look at Biden's approval rating during the last few days, it has ticked up. It was below 39%, like maybe 38.5% in the aggregates that you see at FiveThirtyEight or RealClearPolitics, and now it's a little bit above 39%. That's not much to celebrate, obviously.

But I think Biden finally has a few things going his way. The biggest is the $0.70 per gallon decline in gas prices that we've seen since mid-June. That, by far, is the biggest thing that is on consumers' minds and on voters' minds. And I think people-- most people don't pay close attention to what happens in Congress. So these bills that are coming out, it's not like this is going to boost everybody's paycheck by $500 a month immediately, but I think these are the types of bills that most people can live with.

We have not heard Biden say things-- say much about the hot-button issues such as forgiving student debt, which a lot of people oppose. There are no additional family tax credits in this bill, which might do good for a lot of families but are unpopular with a lot of independents and conservatives. And we should remember that this is not even Biden's bill per se.

This really is a bill that Democrats in the Senate crafted. And in order to get one that they think can pass, they stripped out all that social welfare stuff. So those social welfare programs do-- they could do a lot of good for people, but they're also unpopular. And that's something that Biden will not end up saddled with as the Democrats go into the November midterm elections.

BRIAN CHEUNG: Right. Yeah, well, reminder, yeah, we do those midterms before we have the presidential elections. But Yahoo Finance's Rick Newman, thanks so much for the break down there. Appreciate it.

RICK NEWMAN: See you, guys.