President Biden tried to assure Americans on Tuesday that Federal Reserve Chairman Jerome Powell and the central bank will get control of record inflation, despite the price of gas hitting another high and three-quarters of voters saying the nation is headed in the wrong direction.
“Chair Powell and other members of the Fed have noted at this moment they have been laser-focused on addressing inflation, like I am,” Mr. Biden told reporters during a rare meeting with Mr. Powell at the White House.
The president said the Fed’s decisions on monetary policy will “address the crisis for the American people.”
Consumer prices rose 8.3% in April, near a 40-year high. The Fed raised interest rates by one-half of a percentage point on May 4 in an effort to cool inflation. Mr. Powell has signaled that the central bank plans similar rate hikes in June and July.
Brian Deese, director of the White House National Economic Council, attended the meeting with Mr. Powell. He declined to say whether the president told the Fed chairman that he believes the central bank is moving at the right speed to address rising prices, but he called the meeting “very constructive.”
The president’s economic adviser also wouldn’t venture a guess on how long inflation would remain high.
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“There is uncertainty,” Mr. Deese said. “There are a lot of predictions out there.”
The costs of food and energy are driving much of the increase. Gasoline hit a new nationwide high of $4.62 per gallon on Tuesday, according to AAA.
High inflation is cited as the top concern of voters in this midterm election year, and 75% of respondents said in an NBC News poll this month that the nation is going in the wrong direction.
The president has sought to deflect blame for the spike in inflation on massive federal spending since he took office. He has pointed his finger at global supply chain disruptions, Russian President Vladimir Putin’s military invasion of Ukraine and price-gouging in the U.S. as reasons for rising inflation.
Given the worrisome political trends for the White House and congressional Democrats, Mr. Biden and his team are embarking on a cross-country blitz in June to convince Americans that economic growth and the job market are strong. The unemployment rate in the U.S. in April was 3.6%, the lowest level in two years, and monthly job growth has also been solid.
Mr. Biden previewed his plan in a Wall Street Journal op-ed Tuesday in which he touted the nation’s comparatively strong economic position despite “serious challenges” to the global economy.
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He also highlighted his administration’s moves to reduce the federal deficit, citing a Congressional Budget Office projection last week that forecasts a $1.7 trillion reduction this year.
“We now have a chance to build on a historic recovery with an economy that works for working families,” the president wrote. “The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down.”
Republican National Committee Chairwoman Ronna McDaniel said the president is trying to fool the public.
“After one of the most expensive Memorial Day weekends on record, Biden is lying to hardworking Americans about the economy,” she said. “Under Biden, inflation and gas prices have only gone up, and families are struggling to afford basic needs as a result. Despite what Biden and the Democrats say, the economy is declining steadily on their watch as families can’t afford everything from gas to groceries.”
Last summer, Mr. Biden predicted that high inflation would be “transitory” once pandemic-related supply pressures abated. Nowadays, Mr. Biden says he “can’t catch a break” given the domestic and foreign pressures on prices, according to a report by NBC News on Tuesday that cited a source close to the president.
Republicans pointed to the report as a sign that the president is tone-deaf on the issue of inflation.
“Families are skipping vacations and cutting spending on recreational activities so they can afford food and gas. But Joe Biden thinks he’s the victim,” said the National Republican Senatorial Committee.
Chad Gilmartin, a spokesman for House Minority Leader Kevin McCarthy, California Republican, tweeted, “The reason Joe Biden ‘just can’t catch a break’ is Joe Biden: Biden’s reckless spending fueled inflation. Biden opened the border. Biden failed to prevent the baby formula shortage. Biden’s anti-energy agenda is costing Americans at the gas pump.”
The president said he met with Mr. Powell “to discuss my top priority: that is addressing inflation in order to transition from historic recovery to a steady growth for American families.”
Mr. Biden insisted that he differs from his predecessor by not exerting public pressure on Fed officials. President Trump repeatedly pressed the Fed during a period of strong economic growth to lower interest rates. In 2019, he accused Mr. Powell and his fellow Fed board members of being “boneheads” for holding back the economy with their policies.
“My plan … to address inflation starts with a simple proposition: Respect the Fed, respect the Fed’s independence, which I have done and will continue to do,” Mr. Biden said.
Deferring to the Fed
The Oval Office meeting, which included Treasury Secretary Janet Yellen, was Mr. Biden’s first with Mr. Powell since nominating him in November to serve a second four-year term as Fed chairman.
Mr. Biden said his relationship with the Federal Reserve, which has “a primary responsibility to control inflation,” is key to reducing costs for American families.
“My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation,” he said. “I won’t do this. I have appointed highly qualified people from both parties to lead that institution.”
Beyond highlighting the central bank’s role, the president’s plan calls for further measures to fix broken supply chains, build affordable housing and reduce the costs of prescription drugs.
Mr. Biden’s plan calls on Congress to pass clean energy tax credits, which he said would reduce utility bills by $500 per year for the average American family “and accelerate our transition from energy produced by autocrats.”
He also proposed “common-sense” tax reforms and giving the Internal Revenue Service “the resources to collect taxes that Americans already owe.”
The White House is gearing up for a fight with congressional Republicans over its legislative proposals to fight inflation.
In the op-ed, Mr. Biden contrasts his plan with Sen. Rick Scott’s “11 Point Plan to Rescue America” put forward in the spring. The White House said the Florida Republican’s proposal “would raise taxes on people making less than $100,000 and require that Congress reauthorize bedrock programs like Medicare, Social Security and Medicaid every five years.”
“That would make American families poorer and more economically insecure,” Mr. Biden wrote.
Mr. Biden’s meeting with Mr. Powell was part of a concerted effort to communicate White House accomplishments on the economy and to lay out its plan.
“Talking about the economy and how we can put more money in the pockets of working families will be the key message being driven by the White House all month, in addition to work [that] will continue to communicate along parallel tracks, including combating gun violence,” a White House official said.
As part of the administration’s plan to sell the public on the strength of the economy, Commerce Secretary Gina M. Raimondo will travel Wednesday to Pennsylvania, the battleground for a key Senate race in November. There, she will join Sen. Bob Casey and two House Democrats for roundtable discussions with business leaders “on revitalizing American manufacturing, securing supply chains, and training Americans for good-quality jobs,” her office said.
Ms. Raimondo and other administration officials are urging Congress to pass the $52 billion Bipartisan Innovation Act, which would provide incentives for high-tech manufacturers to build more semiconductor plants in the U.S.
“Other countries aren’t waiting,” Ms. Raimondo told reporters Tuesday. “If we in the United States don’t move quickly, we’re going to miss out. It’s time to end the debate and take action.”
After visits last week to South Korea and Japan and to the World Economic Forum in Switzerland, Ms. Raimondo said she doesn’t think the shortage of computer chips will ease this year.
“I do not, unfortunately, see the chip shortage abating in any meaningful way in the next year,” Ms. Raimondo said. She said the shortage will likely extend “deep into 2023” or possibly into 2024 “until we see any real relief.”