Washington — President Biden attended a private meeting this year to discuss student debt forgiveness. Conversations have returned to inflation, which is often unpleasant these days.
“He said the Republicans would attack him and use the word’inflation’,” California Democratic Party lawmaker Tony Cardenas said of the April meeting between Mr. Biden and Congressional Hispanic Caucus. Said. Mr. Biden said he knew that “whatever the problem we were talking about” would be attacked by rising prices.
The comments emphasized how today’s sharp rise in prices, the fastest since the 1980s, brings clear political responsibility to all the major policy decisions the White House makes. How to talk to voters about inflation.
The administration sometimes revised its inflation-related message several times as it split internally about how to discuss price increases, the issues did not resonate, and new data came in. More aggressive — get in shape ahead of the November midterm elections.
But the reality the White House faces is difficult. Few politicians can do it to end the price hike immediately. The Federal Reserve is the country’s main solution to inflation, but central banks curb price increases by making the money they borrow more expensive to cool demand. This is a slow and potentially painful process for the economy.
Elaine Kamalck, senior researcher at the Brookings Institution and founder of an effective public management center, said: “It’s even worse because it’s so financially and politically difficult. In the short term, there’s nothing we can do to solve it.”
Consumer prices rose 8.3% in the year to April, and Friday’s data showed that inflation was 8.6% in May. Inflation over the five years leading up to the pandemic has risen by an average of 1.6% annually, and today’s pace of increase is painfully higher.One gallon of gas, one of the most specific household expenses Hit the national average $ 4.99 this week. Consumer confidence has plummeted It increases the risk of recession as families pay more for their daily purchases and as the Fed raises interest rates to cool the economy.
The White House has long recognized that rising prices could undermine Mr. Biden’s support, a risk to Mr. Biden last year by one of his chief pollsters, John Ansalone. It was telegraphed to a series of confidential memos sent. Inflation continues to fuel frustration among voters, showing the president’s low approval rate for the economy, which is comparable only to the approach to immigration, according to another memo compiled by Anzalone’s team last month. ..
According to a memo dated May 20, “the economic situation of the people is still bad and we are most concerned about both inflation and the possibility of a recession in the coming months.” Clarify whether the White House received or reviewed the note.
Read more about oil and gas prices
Opinion poll data show that about eight in ten Americans “think that the national economy is in poor shape” and “increasing concerns about the possibility of a recession in the near future.” I am.
Economic instability has been repeated by parliamentarians, leading scholars and pop culture bearers. “When do you think they will announce that we’re in recession?” Grammy Award-winning rapper Cardi B, I wrote in a tweet It became viral this weekend.
The White House knows it’s in a tricky position, and the government’s approach to explaining inflation has evolved over time. Authorities have spent the early stages of the current price burst primarily explaining price pressure as temporary.
When it became clear that rising costs would continue, government officials began to diverge internally on how to assemble the phenomenon. It was clear that much of the upward pressure on prices was due to supply chain shortages exacerbated by the continued wave of coronavirus, but some were also linked to strong consumer demand. That large spending was partially made possible by government stimulus measures, including direct checks to households, expanded unemployment insurance, and other benefits.
Some White House economists have begun to emphasize that inflation is a trade-off. As long as Mr. Biden’s stimulating spending spurred more inflation, it also helped economic growth and a faster recovery.
“Inflation is an absolute problem and it’s important to deal with it,” Treasury Secretary Janet L. Yellen recently told MPs. “But at the same time, I think we should recognize how successful the plan was in leading to an economy where the opposite is true, rather than the large number of workers not being able to find a job completely. “
However, the president’s more political aides claim that strong economic growth has been credited, but the March 2021 package (known as the American Rescue Program) has helped goose inflation. They tended to significantly minimize what they did.
“Some are intrigued by exaggerating the impact of the rescue program, ignoring the global level of high inflation,” said Jean, senior White House adviser overseeing the implementation of the stimulus package.・ For sparring, I wrote on Twitter Last week, the law added that it “has a negligible impact on inflation.”
In an interview last week, National Economic Council Chairman Brian Deese admitted that there was disagreement among White House economic officials on how to talk about and respond to inflation. Something that is positive and does not cause any kind of dysfunction.
“If there is no sound disagreement, debate, and resistance to people bringing problems and ideas to the table, I don’t think we’ll do well for the president and the public interest,” he said.
He also pushed back the idea that the administration was heavily divided on the aftereffects of the March 2021 package, and in another email comment: “Many factors contribute to inflation, which is driven by rising demand. There is an agreement throughout the administration that it has been. ” And supply is limited around the world. “
How to portray the Biden administration’s stimulating spending is far from the only challenge facing the White House. As prices finally rose, Democrats have been working on ways to discuss plans to fight them.
The president and his chief political aide highlight some key issues and lower inflation, including condemning President Vladimir Putin’s invasion of Ukraine, which Biden calls a “price increase for Putin.” He pointed out the reduction of deficits as a method.Claims that the Republicans have Bad plan To deal with rising costs. Biden regularly acknowledges the pain caused by rising prices and emphasizes that the issue of controlling inflation relies heavily on the Fed, an independent agency that he promised not to interfere with. increase.
The administration also emphasized that inflation is widespread worldwide and that the United States is in better shape than many other countries.
A new message arrived as Mr. Biden and his top aides became more and more concerned about the negative views of the people’s economy, officials said. Another person familiar with the debate said economists within the administration were more on the sidelines when it came to conditioning issues like inflation than the previous White House.
So far, almost nothing has been raised to change public perceptions or ease concerns about Capitol Hill, which some Democrats are asking the White House to find more compelling stories. Is not …
“We need to focus more on the economy, a bolder message, and a clearer story,” said California Democratic Party lawmaker Ro Khanna, who wrote an opinion piece for the New York Times last week. Fighting inflation. “Well, the rhetoric about’well, we’re doing really well’doesn’t capture the deep anxiety that Americans feel,” he added.
Part of the difficulty is that politicians can’t do much to combat price increases.
The White House is taking steps to mitigate the effects of inflation or help supply catch up with demand. For example, it released strategic petroleum stockpiles to slow the rise in gas prices and pushed to clear the harbor blockages.
Most of the tweaks are only useful around the edges. Still, inflation influences the debate about all the decisions that the White House entertains.
This spring, Biden suspended a summer ban on high-ethanol petrol blends to curb price increases on pumps, among climate activists who are still angry at the president’s climate and the collapse of social spending packages. It spurred frustration.
Discussions on whether to reduce tariffs on Chinese products during the Trump era have also been caught up in the inflation turmoil. Yellen said he favored tariff relief to ease prices, but other Democrats warned that removing tariffs would make Biden look vulnerable to China. is doing.
Inflation has also influenced one of Biden’s main campaign promises, the conversation about allowing students loan debt. The administration’s economists believe that loan forgiveness will, at best, boost inflation a bit by giving people with unpaid student debt room more financial wiggles. However, some economists on track have already expressed concern about the possibility of doing something that could stimulate demand in the hottest months.
To help mitigate the effects of inflation, forgiveness will most likely be accompanied by the resumption of interest payments on all student loans suspended since the pandemic.
So far, according to people familiar with the matter, the government is considering allowing at least $ 10,000 for borrowers in certain income ranges. Mr Biden knew that inflation would attack him, but said he didn’t think the problem would prevent the president from canceling at least $ 10,000 worth of debt.
“Will it affect him going beyond that? Maybe,” he said.
Jonathan Martin Report that contributed.
