President Biden on Tuesday sought to assuage Americans’ worries about the trajectory of the U.S. economy, pledging in his first-ever State of the Union address that his “top priority is getting prices under control” at a moment of intense inflation.
But the president also acknowledged that millions of Americans still face financial hardships, particularly as the cost of groceries, gasoline, cars and rents has skyrocketed in what has become the fastest period of inflation in four decades. On a day when geopolitical tumult threatened additional shocks, Biden promised fresh vigilance in Washington to protect families at risk of falling further behind.
“With all the bright spots in our economy, record job growth and higher wages, too many families are struggling to keep up with their bills,” Biden said. “Inflation is robbing them of the gains they might otherwise feel.”
“I get it,” Biden continued. “That’s why my top priority is getting prices under control.”
Specifically, Biden called on Congress to support a number of economic initiatives, including efforts to provide monthly tax payments for families with children, policies to lower prescription drug prices for seniors and legislation to raise the minimum wage for millions of workers. The president voiced anew his plans to address logjams in “global supply” that have driven up prices for some goods, like automobiles. And he promised to combat corporate conglomerates, which he said may be squeezing consumers through price gouging.
Many of Biden’s ideas originated in blueprints he has unveiled since assuming the presidency, including a signature initiative known as the Build Back Better Act, a roughly $2 trillion proposal that ultimately faltered last year because of still-simmering divisions among his fellow Democrats.
Other ideas were newer, including a fresh effort to ensure that trillions of dollars in existing federal spending — approved to combat the coronavirus pandemic — did not fall into the hands of criminals. The promise arrived amid a slew of reports about the vast and expanding scope of pandemic-related fraud, including a recent investigation by The Washington Post that found rampant abuse in some of the country’s programs to aid businesses.
But Biden’s move to recast many of his embattled initiatives reflected an attempted tactical reset at a time when Americans have grown worried about the economy and his handling of it. And it reflected a looming political imperative for Democrats, broadly, who secured control of the nation’s corridors of power by promising major change — a standard to which they may be held entering the 2022 midterm elections.
“It’s not too late to meet this moment,” a group of top House Democrats urged Biden in an open letter earlier Tuesday. Its backers included the leaders of some of the chamber’s top voting blocs, including Reps. Pramila Jayapal (D-Wash.) of the left-leaning Congressional Progressive Caucus and Suzan DelBene (D-Wash.) from the more centrist-minded New Democratic Coalition.
“There is broad consensus on the most critical solutions Americans need to lower costs for families, tackle the climate crisis, and create opportunities and good-paying jobs,” they added. “It is time to act.”
In Republicans’ official rebuttal, televised after Biden spoke, Iowa Gov. Kim Reynolds (R) blamed the president and his Democratic allies in Congress for “runaway inflation” resulting from their significant uptick in spending.
“It feels like Biden and his party have sent us back in time — to the late ’70s and early ’80s. When runaway inflation was hammering families, a violent crime wave was crashing on our cities, and the Soviet army was trying to redraw the world map,” Reynolds said.
Only a few weeks ago, Democrats had expected Biden to deliver his address focused predominantly on the economy. But a simmering pandemic, a sustained increase in prices and a new international crisis in Ukraine soon forced the White House to recalibrate some of its approach.
To open his State of the Union, Biden instead spoke at length about the conflict raging in Europe. He promised to aid Kyiv as lawmakers readied potentially $10 billion in humanitarian and military assistance, just days after the White House urged Congress to act swiftly to provide billions in support. The president also pointed to Washington’s work alongside Europe in imposing unprecedented, sweeping sanctions on Russia for invading Ukraine, meting out punishments that administration officials have acknowledged could have spillover efforts globally.
Illustrating the point, the Dow Jones industrial average tumbled nearly 600 points just hours before Biden spoke late Tuesday. The conflict also threatened to intensify a recent spike in gas prices, further cutting into Americans’ budgets and leaving them discouraged about the economy and its direction. Prices overall have risen 7.5 percent in the past year, with essentials such as gas and groceries notching some of the largest gains, according to the consumer price index.
Biden still stressed the country’s recent gains in combating the toll of the coronavirus. He touted the adoption of the $1.9 trillion American Rescue Plan last March, for example, which he said had “created over 6.5 million new jobs just last year, more jobs created in one year than ever before in the history of America.” And Biden seized the national stage to remind voters about his toils alongside Democrats and Republicans to secure $1 trillion in long-sought investments to improve the nation’s infrastructure.
But Biden took pains to stress that Washington still faced considerable work to ease the fuller array of financial burdens facing American families, particularly as a result of inflation. He urged Congress to raise the national minimum wage to $15 an hour from $7.25, where it has remained since July 2009. He renewed calls for a paid family and medical leave program for millions of Americans who do not have it. He endorsed an increase in Pell Grants for low-income students attending college. And Biden petitioned lawmakers to revive a program that provided monthly payments to families with young children. The previous, expanded child tax credit program expired at the end of last year.
“When we invest in our workers, when we build the economy from the bottom up and the middle out together, we can do something we haven’t done in a long time: build a better America,” Biden said.
Some of those ideas have faced intense opposition from members of the president’s own party. In the Senate, where Democrats need every member to advance their spending agenda over Republican objections, Sen. Joe Manchin III (D-W.Va.) blocked lawmakers in the final hours of 2021 from advancing a roughly $2 trillion economic spending package. The measure included funding to combat climate change, aid to boost child-care services and a slew of additional help touted by the president Tuesday, including efforts to raise taxes on the wealthiest Americans.
In a bid to sell his rebranded agenda to Manchin, Biden also emphasized that the sum total of Democrats’ plans could ultimately lower the federal deficit. The centrist West Virginia had opposed the Build Back Better Act in part because he said it was not financed in full, even though the administration produced fiscal analyses that showed it was.
“By the end of this year, the deficit will be down to less than half what it was before I took office,” the president promised.
To secure some of the savings, Biden highlighted a new, separate administrative initiative to keep closer watch over roughly $6 trillion in coronavirus aid approved since the start of the pandemic. Much of the money had been approved on a bipartisan basis beginning under President Donald Trump before Democrats adopted a $1.9 trillion rescue package that counted as Biden’s first major legislative achievement.
Under the effort, Biden said he would bolster the Justice Department and its enforcement against fraud and identity theft, including through the appointment of a chief prosecutor to oversee related investigations. And the president called on Congress to toughen penalties against “egregious” misuse of these emergency funds.
Much of Biden’s economic agenda is likely to draw opposition from Republicans, who previously have rejected many of Biden’s economic plans — and affirmed their stance in the hours before the president spoke.
“When it comes to the economy, we have a state of the union in crisis,” said Rep. Kevin Brady (Tex.), the top Republican lawmaker on the tax-focused House Ways and Means Committee, blaming the president for seeking spending increases that have worsened inflation.
But Democrats on Tuesday cast the speech as an important inflection point, a time for Biden to champion recent, significant successes while rekindling the debate around his stalled policy agenda.
“The road has not been easy and certainly the work is not yet done. The pain of inflation is being felt around the world, thanks, largely, to the disruptions of the pandemic,” said Senate Majority Leader Charles E. Schumer (D-N.Y.) in a speech earlier in the day. “These problems must be handled, and Democrats and the Biden administration continue to work on them like a laser.”
An earlier version of this article said that Biden would speak from the well of the House during the State of the Union. He spoke at the dais. The article has been corrected.