Biden's economic gamble
Photo illustration: Sarah Grillo/Axios. Photo: Tom Brenner/Bloomberg via Getty Image
President Biden is preparing to run for re-election with a relentless, aggressive focus on the economy — convinced the data cuts in his favor, even as vast swathes of the public remain skeptical that conditions have improved.
Why it matters: It’s a high-risk, high-reward strategy.
The gamble: If GDP holds steady and the record unemployment stays low, Biden plans to ride a healthy economy to a second term.
- But if the economy enters a deep recession before November 2024, the president will have spent precious political capital demanding credit when voters might be more inclined to hand out blame.
Driving the news: Biden, who hasn't made a formal decision to run for re-election, will on Tuesday take his message of economic optimism to Virginia Beach, where he'll also hammer Republicans for wanting to repeal his signature Inflation Reduction Act.
- His argument: Republicans plan to increase health care costs for millions of Americans.
- Next week, Biden’s 2024 budget will take center stage, and he’ll emphasize his plans to cut deficit spending by $2 trillion over 10 years.
- Biden will also continue to call on the House Republicans to unveil their own budget and specify what programs — if any — they want to cut.
What they're saying: "We're very proud of the 12 million jobs created since the president took office," Bharat Ramamurti, the deputy director of the National Economic Council told Axios.
- "We think the underlying numbers about consumer spending and business investment are also positive," he said. "They show that people have a lot of confidence in their financial condition and where the economy is headed."
- “As we’ve always said, we expect there to be some bumps along the way as we transition to steady and stable growth."
By the numbers: In addition to the 12 million jobs added to Biden's economy, officials like to highlight the 3.4% unemployment rate, which is a 50-year low.
- The economy expanded at an annualized 2.7% in the fourth quarter.
- Biden takes the record 10.5 million small business applications in his first two years as individual votes of confidence in his handling of the economy.
The other side: Republicans continue to attack Biden over the cost of everyday goods and are convinced the public shares their skepticism about Biden’s economic record.
- A Sunday poll from Fox News shows that 62% of respondents disapprove of Biden's handling of the economy, while 36% approve. On inflation, 66% disapprove and 31% approve.
- Those numbers echo a Washington Post-ABC News survey from late January in which 41% of Americans said they were not as well off financially compared to when Biden took office. 16% said their prospects have improved.
- Data from last Friday showed consumer spending and inflation heated up again in January, suggesting it will take a more serious economic downturn to bring down prices.
Between the lines: In a divided government, Biden doesn't really control the velocity or direction of the economy.
- The economy's fate is largely in the hands of the Federal Reserve, which remains concerned about inflation and is likely to continue to raise interest rates to slow down the economy.
- But Biden does have ways to control perceptions of the economy and who gets the credit — or the blame — if it turns up or down.
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