President Joe Biden told the largest federation of trade unions on Tuesday that he was working to rebuild the American economy around working people – while at one point wrongly stating that families had less debt and more savings than when he took office.
The speech at the AFL-CIO convention in Philadelphia was the president’s attempt to reset the terms of the debate on the economy as his own approval ratings slipped as consumer prices — and the cost of gasoline – jumped.
“Since I took office, with your help, families across the country have less debt. They have more savings across the country,” Biden said.
But despite the president’s statements, Federal Reserve data shows household debt has increased by more than $1.5 trillion since Biden took office in January 2021.
And the country’s credit card debt is also at record highs after jumping nearly 20% during the month of April to $1.103 trillion. The previous pre-pandemic record was $1.1 trillion.
Americans’ savings accounts have also shrunk by more than $9,000 in the past year – from $73,100 in 2021 to $62,086 in 2022 – according to a survey of the wealth management company Northwestern Mutual.
The country’s current economic outlook is largely due to inflation, which is at its highest level in over 40 years. That caused voters to sour on the economy, despite a mixed recovery from the 2020 pandemic-induced downturn that led to robust hiring and a healthy 3.6% unemployment rate.
The president on Tuesday tried to remind his audience of food lines and layoffs during the coronavirus pandemic that preceded his presidency, contrasting that with improvements in household balance sheets under his leadership.
He also took aim at “widespread lies about reckless spending” – an apparent reference to widespread criticism of his COVID stimulus package, which most experts say has at least partially fueled rising inflation.
Household debt has increased by more than $1.5 trillion since Biden took office in January 2021
Inflation is at its highest level in more than 40 years – causing voters to feel bad about the economy, despite a mixed recovery from the 2020 pandemic-induced downturn that led to robust hiring and downturns. a healthy unemployment rate of 3.6%
President Joe Biden told the largest federation of labor on Tuesday that he was working to rebuild the US economy around working people, but twisted the truth when he spoke about federal debt and family spending.
Even some Democrats who align themselves politically with Biden have suggested government spending has been a problem for middle-class families.
Economist and former Obama administration official Larry Summers predicted as much in February 2021.
“It is possible that macroeconomic stimulus on a scale closer to World War II levels than normal recessionary levels could trigger inflationary pressures of a kind we have not seen in a generation, with consequences for dollar value and financial stability,” he wrote in an op-ed for the Washington Post.
“It will be manageable if monetary and fiscal policy can be quickly adjusted to address the problem. But given the commitments made by the Fed, the dismissal by administration officials of the very possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is a risk that inflation expectations rise sharply.
Economist Ellen Gaske of PGIM Fixed Income said that was exactly the mistake the Biden administration made.
“In retrospect, that was more than needed,” Gaske told The Associated Press. “It was not just the size of the (relief) programs, but these direct cash payments to households added purchasing power very directly. And when you pushed it away
Biden, however, contradicts these claims by saying that social spending has reduced the deficit by $350 billion – and will reduce the deficit by up to $1.6 trillion by the end of 2022.
The president continued to rail against his critics of spending during his speech on Tuesday: “I don’t want to hear those lies about reckless spending anymore.” We change people’s lives. And because of the fact, this year we are achieving the largest deficit reduction in the history of the United States of America.
But even as the economy quickly piled up jobs, high inflation left many workers feeling worse off as wages failed to keep up with the cost of living. The Labor Department said Friday that average hourly wages, after adjusting for inflation, have fallen 3% over the past year.
Inflation has left Biden and Democrats’ control of the House and Senate vulnerable in the upcoming midterm elections.
Biden says social spending cut deficit by $350 billion and will cut deficit by $1.6 trillion by end of 2022
The price of a gallon of gasoline in the United States continues to soar under the watch of Biden
Prices for everything from gas to travel to hotels have risen by double digits since January 2021
Republican lawmakers have blamed the president’s $1.9 trillion coronavirus relief package for causing inflation to rise last year.
GOP lawmakers also say the Biden administration has been too restrictive on domestic oil production.
“Working family budgets have been pushed to the bottom of the far left’s wish list,” Senate Republican Leader Mitch McConnell of Kentucky said Monday.
Biden says the GOP is focused on lowering taxes for businesses and the wealthy.
Republicans say their 2017 tax overhaul created a stronger foundation for growth by lowering corporate tax rates, making American businesses more competitive.
Republican lawmakers have blamed the president’s $1.9 trillion coronavirus relief package for pushing up inflation last year
They say allowing businesses and individuals to keep more of what they earn will spur growth, while Biden counters that laws allowing unionization and increasing childcare benefits for families will lead to the growth thanks to a stronger middle class.
Biden tried to specifically target a proposal by Sen. Rick Scott, R-Fla., which suggests that all Americans should pay federal income taxes.
Many Republican lawmakers have either disavowed the proposal or offered caveats that tax credits are a means of financial support for America’s poorest and middle-class families.
“Republicans have it all upside down: their plan literally calls for raising taxes on the middle class and working people and lowering taxes on corporations and wealthy Americans,” Biden said. “I believe in bipartisanship, but I have no illusions about this republican party, the MAGA party.”
The three main stock markets in the United States all crashed on Monday – the S&P 500 officially entering bearish territory amid growing fears that the country could soon enter a recession.
The S&P 500 fell 3.9%, bringing it more than 20% below the all-time high it set in January and wiping out all market gains since President Joe Biden took office in January 2021. The Dow Jones index fell 900 points on Monday. as well.
“Republicans have it all upside down: their plan literally calls for raising taxes on the middle class and working people and lowering taxes on corporations and wealthy Americans,” Biden said. “I believe in bipartisanship, but I have no illusions about this republican party, the MAGA party”
The president also focused on a long-standing priority during his speech on Tuesday: building union membership.
But he faces an uphill battle to restore the labor movement, which has waned for decades as it has become harder to organize workers and many factory jobs have drifted away from communities with a history of unionization.
Only 10.3% of American workers belonged to a union last year, down from 20.1% in 1983, according to the Bureau of Labor Statistics.
The nature of union membership has also changed over time, as nearly half of union members work for the government. Only 7.7% of manufacturing workers and 12.6% of construction workers hold union cards, as the movement’s blue-collar roots branched out into white-collar occupations.
Despite the decline in union membership, the movement still generates value. Government figures show the median union worker earns about $10,000 more per year than a non-union worker.
“We should encourage unions,” Biden said. “I’m not saying this just to be pro-union. I say this because I am pro-American.