WASHINGTON (AP) – President Joe Biden has stopped talking so much about inflation concerns.
His observations in Columbus, Ohioin the Washington suburbs at a Democratic fundraiser, in a cabinet meeting and in Labor Day speeches in Milwaukee and Pittsburgh they all lacked a once common refrain about families at the kitchen table striving under the rising costs of food and gasoline.
This is a self-change ahead of November’s mid-term elections, driven in part by easing inflationary pressures. But Biden is also trying to shift the spotlight on his legislative victoriesthe loss of protections against abortion and the threats he believes are posed to democracy by the many Republican leaders still under the influence of former President Donald Trump.
When Biden addressed inflation in a speech on Monday at the Boston airport, he emphasized progress, rather than financial pain, on what he says is his top economic priority. Biden has largely blamed the inflation on global forces such as Russian President Vladimir Putin’s invasion of Ukraine in February, even though he says his own policies are reducing the burden of rising taxes. prices.
“We are on the right track,” the president said Monday, noting the lower costs of gas but adding the warning: “There is still a lot to do, much more to do”.
Pump prices are averaging $ 3.72 per gallon, having surpassed $ 5 per gallon in mid-June, and the president’s approval ratings have recovered slightly. Yet inflation still remains a challenge.
The government will release its consumer price report for August on Tuesday, with economists interviewed by FactSet forecasting annual inflation of 8.1%. It’s down from its 40-year peak of 9.1% in June, but is well above the Federal Reserve’s 2% target.
“The most public price – gasoline – has dropped significantly,” said Austan Goolsbee, a University of Chicago economist and former Obama White House aide. “In that type of environment, other concerns tend to rise on people’s lists. That could certainly change if the inflation numbers start to get worse. “
A senior White House official, insisting on anonymity during a Thursday phone call with reporters, said recent inflation trends have given the administration some optimism. The White House is banking on the possibility that the Federal Reserve’s interest rate hikes bring inflation to pre-pandemic levels without sacrificing job earnings over the past 18 months.
“The Fed will need a lot of skill and even some luck to get what we sometimes call a soft landing,” Treasury Secretary Janet Yellen told CNN on Sunday. “I believe there is a path to do it.”
Still, many leading economists, including researchers who presented this week at the Brookings InstitutionThey warn that reducing inflation will likely mean layoffs and a drastic rise in the unemployment rate despite Biden’s hopes.
There is a risk that Biden will walk away from the inflation discussion, said Douglas Holtz-Eakin, an economist who advised Republican campaigns and is now chair of the center-right American Action Forum. Holtz-Eakin noted that oil prices have largely declined with falling demand from China, which could reverse in October if that country removes the coronavirus blockades.
He said that democratic fortunes may ultimately depend on the movements of global energy markets with their mix of geopolitics, corporate profits and financial speculation.
“They do this at their own risk,” Holtz-Eakin said of the change in messaging. “If you look at the numbers, there hasn’t really been much progress on inflation. Everything they got on inflation was determined by international conditions and global oil prices. “
Meanwhile, Republican lawmakers are trying to keep voters focused on the GOP version. They say Biden’s $ 1.9 trillion coronavirus aid package and resistance to oil drilling leases have led to inflation, although prices are rising around the world due to the pandemic. Russian invasion of Ukraine and troubled supply chains.
Republican Senate leader Mitch McConnell noted the financial pain felt by manufacturers, farmers and construction companies in his home state of Kentucky.
“The Washington Democrats have spent nearly two years borrowing, printing and spending our economy in turmoil,” McConnell said in a Wednesday Senate speech. “Since President Biden took office, prices in (Kentucky) have risen 13%.”
That figure McConnell cites comes from the Joint Economic Committee of Congressional Republicans. It is higher than the inflation numbers seen by most Americans because it is over Biden’s presidency, rather than the annual rate that is commonly quoted.
White House officials still describe inflation as Biden’s top economic priority. On Friday, the administration released a 58-page economic project detailing its work on infrastructure, climate change, computer chip manufacturing and other policies. The project stated that moving forward: “The president’s short-term priority when it comes to the labor market is to lower inflation without giving up the substantial progress we have made for American workers.”
But the president also embarked on the political offensive regarding inflation, noting that the GOP opposed the law signed last month that limits prescription drug prices, funds climate-related investments, raises corporate taxes and cuts the federal budget deficit.
Biden says the measure, which Democrats call the “Inflation Reduction Act,” will help reduce prices, although external analysis suggests the impact may be negligible.
“You think if they really cared about inflation – reducing it – they would vote for the inflation reduction bill,” Biden said in his Thursday speech at a Democratic fundraiser. “Every Republican in the House, every Republican in the Senate, voted against. All.”