Biden ignores recession talk, talks about fighting inflation

WASHINGTON (AP) — President Joe Biden and his administration pulled out all the stops Thursday to downplay troubling news economic report it added to the evidence of a recession, trying to focus instead on major legislative progress on measures to control inflation, reduce debt and preserve America’s competitive edge.

The desire to accentuate the positive reflected the political tensions that are already playing out in the run-up to the midterm elections. Republican lawmakers are sounding the alarm that a downturn has already begun, a claim disputed by Biden and his fellow Democrats who wanted the public to focus instead on a pair of likely congressional wins.

Thursday reflected the constant back-and-forth that has defined the Biden administration, in which any triumph can be eclipsed by a setback and the news cycle moves at a faster pace than victory laps. This has created dueling narratives about where the country is.

Republicans said the report showing the economy contracted for the second straight quarter was evidence of a “Biden recession” at a time when inflation is at its highest level in four decades.

Biden, in turn, cited near-record unemployment and signs of continued business investment in the economy. He said: “It doesn’t look like a recession to me.”

The president celebrated the passage by Congress of a $280 billion bipartisan package to boost the United States semiconductor industry and the sudden resurrection of a Proposal reserved for Democrats to reduce prescription drug costs, fight climate change, fund the IRS, establish a minimum corporate tax, and reduce the deficit.

Other White House officials followed Biden’s lead and ignored the gross domestic product report showing the economy contracted at an annual rate of 0.9%.

“Where we are right now is that we’re on the verge of doing some really historic things that would help move the economy forward,” Brian Deese, director of the White House National Economic Council, told Reuters. Associated Press, when asked about the disturbing GDP report. “That’s our goal.”

In a rare press conference, Treasury Secretary Janet Yellen admitted that Americans are fundamentally concerned about inflation, not back and forth between Democrats and Republicans over whether the GDP report showed that the economy had entered a recession.

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“We should avoid a semantic battle,” Yellen told reporters, adding that “Americans’ biggest concern is inflation” and that they generally feel good about their ability to find a job and stay employed.

Still, the Treasury Secretary deployed her own rhetoric, saying growth was “slowing”, as the GDP report showed the size of the economy had shrunk over the past six months.

The supreme arbiter of if the country is in recession is the National Bureau of Economic Research, which may not rule for some time.

Yellen described the downturn as positive for an economy returning to normal after the pandemic, contrary to Republicans’ argument that it was a shameless failure caused by Democratic policies rather than a convoluted attempt by the world to emerge from the coronavirus pandemic.

That debate has spilled over to the semiconductor bill now awaiting Biden’s signature and new climate and drug pricing legislation that Democrats have dubbed the ‘Cutting Inflation Act’. of 2022”. The administration says both bills would fight inflation, while Republican opponents say they will drive up prices.

“This morning the government announced what every American has felt for almost a year – we are in a recession,” House Republican Minority Leader Kevin McCarthy said in a floor speech. “Democratic spending caused this inflation. And now they are doubling down on the same failed strategy.

Other Republicans moved quickly to capitalize on the report, with the Republican National Committee declaring it indicative of the “Biden recession.”

Even the White House acknowledges that the legislative proposals won’t have an immediate effect on consumer prices or economic output, but it thinks voters will reward Biden and Democrats for being seen as offering solutions to challenges affecting household results.

Biden told The Associated Press in an interview earlier this year that he sees his mission as giving Americans a renewed sense of confidence, but the faith he seeks to retain and spread is steadily eroding as losses linger in people’s memory and the victories are easily forgotten.

Even though a US recession is an open question for economists, the question of the economy’s health is largely settled among voters.

Nearly 8 in 10 Americans described the U.S. economy as bad and about 7 in 10 disapproved of Biden’s economic leadership, according to a June survey by the AP-NORC Center for Public Affairs Research. Consumer sentiment, as measured by the University of Michigan, began to decline as inflation persisted as a threat, with Democrats’ confidence relatively weak.

The Federal Reserve, which sharply raised interest rates on Wednesday to further slow the economy in an effort to reduce inflation, signaled that more hikes are on the horizon, a sign that the battle against the inflation – and the ensuing political skirmishes – could continue until the November election this year.

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