President Joe Biden may have finally gotten the economy he wanted. But any political spoils will go to his successor.
Biden on Thursday touted the work that his administration has done in steering the nation’s economy over the last three-and-a-half years and promised it would continue to prosper under the candidate he wants to succeed him, Vice President Kamala Harris. Despite an economy that most metrics indicate is succeeding, Biden and his team have struggled to communicate their successes to the American people — and polling suggests that most voters still aren’t happy with his economic leadership.
In a speech at the Economic Club of Washington D.C., Biden listed the ways the economy he inherited has rebounded since the worst of the Covid-19 pandemic, both to burnish his own legacy and make the case for Harris as she tries to ward off the economic attacks from Republican nominee Donald Trump.
“You know I believe it’s important that the country recognize this progress,” Biden said, with an eye toward his economic legacy and burnishing Harris’ campaign message. “Because if we don’t, the progress we’ve made would remain locked in fear and a negative mindset that has dominated our economic outlook since the pandemic began.”
Still, the president made painstaking efforts to convey he understood Americans’ frustration and that he was “not here to take a victory lap.”
“I'm not here to say, ‘a job well done.’ I'm not here to say, ‘We don't have a hell of a lot more work to do,’” Biden said.
Biden spoke a day after the Federal Reserve cut interest rates a half-point, an important marker that suggested a shift from fighting inflation to helping economic stability. And the president seized upon the cut — bigger than many economists predicted — as a sign the economy was moving in the right direction.
“The Fed lowering interest rates is not a declaration of victory, it’s a declaration of progress,” Biden said.
Still, Trump and top Republicans have seized on the magnitude of the cuts announced by Federal Reserve Chair Jerome Powell as a sign that the economy is in much worse shape than Biden or Harris have let on. The Fed typically adjusts rates in quarter-of-a-percentage point increments, and the half-point cut was the first reduction since large swaths of the global economy were shutting down due to Covid-19.
Polls have suggested that the economy is a central issue for voters and that many trusted Trump’s leadership on the issue over Biden, a source of great frustration within the West Wing. While several polls say Trump still has an advantage over Harris on economic policy, she has closed the gap in some recent surveys, potentially mitigating one of his most significant advantages over the Democratic ticket.
Powell and other Fed policymakers tailored the size of its cuts to address a softening labor market that’s alarmed leaders of both parties — and some investors. While the unemployment rate remains low by historical standards, it’s been edging higher since the start of the year. Weaknesses in the jobs market usually portend a slowdown in consumer spending, which has kept the U.S. economy afloat in recent years despite elevated inflation and high borrowing costs.
The Fed has a dual mandate to keep prices stable and maximize employment.
In his speech, Biden also took aim at Trump’s assertion that the president should have a say in setting rate policy, claiming that he’d “never once spoken to the Chairman of the Fed since I became president.”
But Biden did meet with Powell in 2022 as inflation was climbing. Powell told lawmakers this summer he hadn’t met with Biden in two years.
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