WASHINGTON — After a seemingly lackluster labor market report in September, President Biden tried to assure Americans that his economic policies were working.
His was a decidedly soft sell, particularly when it came to the roaring stock market, which his predecessor loved to boast about.
“You know, there have been so many records the stock market has hit under my presidency. Imagine if the other guy was here: ‘We’re doing great. It’s wonderful. The stock market is surging. It’s gone up higher under me than anybody,’” Biden said in a White House speech. ”But … that doesn’t mean that it’s the best for the economy.”
It’s true that the ups and downs of Wall Street aren’t the best indicator of how average Americans are doing. But Biden downplaying the slew of record highs in major US stock indexes is one example of how, in the eyes of many Democrats, he has consistently undersold an economy that has made real gains during his tenure.
That reticence, they say, has created a perilous and frustrating dynamic for the president and his party ahead of next year’s midterm elections: His economic approval ratings are tumbling even as the economy is poised to post its best annual growth in decades and unemployment has hit a pandemic-era low. The lack of a strong message about those economic gains has made it easier for Republicans to keep the spotlight instead on a growing concern this year: inflation.
“The White House shouldn’t expect people to give him credit for something he’s not taking credit for,” said Simon Rosenberg, president of NDN, a centrist Democratic think tank.
It’s a problem that also plagued former president Barack Obama: a hesitancy to tout economic improvements out of concern that many people continue to struggle. In Biden’s case, it’s exacerbated by comparison to Donald Trump, who incessantly bragged about — and frequently overhyped — the state of the economy during his presidency.
At times, Biden and his advisers seem to be torn between taking credit for signs of economic improvement and making the case for more action. In the September speech, for example, Biden pivoted from talking about what he’d already done for the economy — his $1.9 trillion American Rescue Plan enacted in March — to what he wanted to do in his infrastructure and social spending bills. He used the stock market performance simply to make a broader case that “big corporations and the super-wealthy” could afford to pay higher taxes to help fund his proposed initiatives.
Democratic strategists said Biden’s economic approval also has been hurt by the messy intraparty battle over passing major parts of his legislative agenda. While Congress finally enacted the $1.2 trillion infrastructure bill in November, the larger, roughly $2 trillion Build Back Better social spending and climate change legislation remains stalled amid disputes between progressives and moderates over its size and scope — and united opposition from the right.
“Essentially, the Biden administration has said, ‘We have this great bill here. It’s going to help the economy.’ And I think voters are saying, ‘Where is it?’” said Brad Bannon, who heads a political polling and consulting firm that works for Democratic candidates. “I think [administration officials have] been afraid to boost the economy too much because they thought if the economy’s doing so well, why do we need Build Back Better?”
Republicans have stepped into the vacuum the Biden administration created about the American Rescue Plan, which provided $1,400 payments to most Americans, enabled the administering of tens of millions of COVID vaccinations, and is widely credited with fueling this year’s strong economic growth. In the GOP’s telling, all the bill did was ignite rising prices, a phenomenon they’ve branded as “Bidenflation.”
“Inflation is hammering working families from coast to coast, but Democrats want to print, borrow, and spend billions more,” Senate minority leader Mitch McConnell said on Wednesday. “Our economy is already sputtering on their watch, but Democrats want to wallop the country with massive tax hikes that would kill American jobs and discourage industry from locating here in our country.”
McConnell’s jibe about a “sputtering” economy is pure politics. Annual economic growth is accelerating as the year draws to a close and is on track to be nearly double in 2021 what it was in 2018, the best year of the Trump administration. But Inflation is a legitimate concern, and one that the White House (backed up by Federal Reserve officials and many economists) largely dismissed this spring as likely only a temporary problem. It’s become much more than that.
The Consumer Price Index, a key inflation measure, was up 6.2 percent in October compared to a year earlier, the highest rate since 1990. A Gallup Poll released on Thursday found 45 percent of US households said recent price increases were causing their family some financial hardship. The figure was even higher — 71 percent — for low-income families, with more than a quarter of them describing the hardship as severe and hurting their standard of living.
Inflation is up worldwide as reopening economies have struggled with supply chain bottlenecks, a fact that indicates the problem is not entirely the result of domestic policy, but Biden is nevertheless taking much of the blame. About three out of five registered voters, including 46 percent who are Democrats, said his administration’s policies are at least somewhat responsible for inflation, according to a poll by Morning Consult and Politico released on Nov. 17.
As inflation has risen, Biden’s economic approval rating has fallen, from 54 percent in February to 38 percent in November, according to Gallup. The decline has mirrored the slump in his overall approval rating.
But aside from high inflation — a significant aside — the US economy is strong, although there is nervous anticipation about the potential impact of the Omicron variant.
After decelerating this summer because of the rise of the Delta variant, overall economic growth is expected to have rebounded to a roughly 5 percent annual rate in the last three months of this year. On Wednesday, the Organization for Economic Cooperation and Development forecast that the US economy grew 5.6 percent in 2021, which would be the highest annual growth since 1984.
Job growth under Biden has been robust despite November’s gain of just 210,000 new jobs, reported Friday, a figure that came in well below forecasts. Some analysts expect that figure will be revised up significantly as others recently have been in the complicated labor market recovery, a pattern that more than once has robbed Biden of upbeat media coverage of the monthly jobs report. The US economy has added a record 6.1 million new jobs so far this year, coming off the deep job losses in 2020, and the unemployment rate last month was 4.2 percent, the lowest since February 2020.
Biden touted those gains in a speech on Friday while also emphasizing more needs to be done on the economy and in fighting COVID.
“Because of the extraordinary strides we’ve made, we can look forward to a brighter, happier new year ahead in my view. But I also know that despite this progress, families are anxious,” he said at the White House before making another pitch for his Build Back Better bill.
“They’re anxious about COVID. They’re anxious about the cost of living and the economy more broadly. They’re still uncertain,” he said. “I want you to know I hear you … and that’s why every day my team and I are working to deliver consistent, determined, focused action to overcome the challenges we still face.”
A White House official who declined to be named said Biden and administration officials have been talking up the economic gains but media coverage has been more focused on rising prices. The official pointed to a poll released Thursday by Navigator Research showing 77 percent of registered voters support the American Rescue Plan and about six in ten support the Build Back Better bill when told of some of its components, including universal preschool and allowing Medicare to negotiate for lower drug prices.
Still, that poll showed nearly three-quarters of respondents rated the state of the economy negatively and 59 percent said they felt uneasy about their personal financial situation over the next few months. It’s a reflection of the power of inflation, which people see every day when they pump gas into their car or buy groceries. High inflation has pummeled the approval ratings of past presidents.
“It is tricky to talk up the economy when people aren’t feeling good,” said Mark Mellman, a Democratic pollster. “Politicians run a risk of alienating people for being … disconnected from the reality they face.”
But Biden also might not be the best person to tout his own policies, with a speaking style that can be “kind of ineffective,” said Stuart Rothenberg, senior editor of the nonpartisan Inside Elections newsletter.
“He conveys a sense of caring, but I think as the messenger he comes up a little short in trying to convince people how effective he has been and what he has done and how they’re benefiting,” Rothenberg said.
But Obama was known as an outstanding communicator and he also didn’t get credit for the economic recovery he presided over. The US created more jobs in the last three years of his presidency than in the first three years of Trump’s, before the pandemic cratered the economy.
Some Democrats have fared better than others when it comes to economic credit. Bill Clinton was widely praised for the strong economy of the mid to late-1990s. But Obama and Biden took office under different circumstances, said Rosenberg of NDN. Both were elected in times of national crisis and after immediately tackling those troubles by enacting major legislative packages, each pivoted to new initiatives — Obama to health care, Biden to infrastructure and Build Back Better — without adequately highlighting what they had already done.
“The real lesson for me from early Biden and Obama is that Joe Biden should be spending the next four or five months … firmly establishing the link between the American Rescue Plan and this robust economic recovery we’ve seen and the very strong tackling of COVID,” Rosenberg said. “If those linkages aren’t established, he may never get credit for those things.”