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Biden talks inflation: Another swing and a miss

Voters just aren’t buying what the president is peddling

President Joe Biden’s prescription for what ails the economy is really just old-school Keynesian economics wrapped up in new green packaging, Winston writes.
President Joe Biden’s prescription for what ails the economy is really just old-school Keynesian economics wrapped up in new green packaging, Winston writes. (Tom Williams/CQ Roll Call file photo)

What little credibility President Joe Biden still enjoys with the electorate took another hit Tuesday with a so-called inflation speech so full of misstatements and misinformation it is hard to know where to begin. So, I’ll start with the president’s most egregious claim — that Republicans “don’t want to solve inflation by lowering your costs. They want to solve it by raising your taxes and lowering your income.” 

And he went even further, saying that “congressional Republicans have proposed increasing taxes on teachers and firefighters.” Wait. What?

Biden deliberately misspoke, claiming that a plan proposed by Sen. Rick Scott, a plan with no apparent support from his colleagues, represents the agenda of “congressional Republicans,” a point he repeated over and over again throughout the speech. He made this erroneous accusation despite Senate Minority Leader Mitch McConnell’s statement to the contrary. 

In March, McConnell said, “We will not have as part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare within five years.” 

“That will not be part of the Republican Senate Majority agenda. We will focus instead on what the American people are concerned about: inflation, energy, defense, the border and crime.” It doesn’t get much clearer than that.

But this isn’t the first time the Biden administration has tried to tie congressional Republicans to the Scott proposal. 

In April, Biden tweeted: “Under the Congressional Republican Tax Plan: -$100 billion will be taken out of the hands of middle class families each year -24 million families of seniors making less than $100,000 per year would face tax increases.”

That was even too much for The Washington Post, which promptly gave the statement three Pinocchios. And yet here was the same spin on full display again Tuesday.

Biden’s “inflation” speech was mostly a rehash of a series of speeches filled with misstatements that he has delivered in a failed attempt to convince voters that the economy is actually doing much better. Yes, inflation is a problem, but not to worry, he’s got a plan to fix it, if only the “ultra MAGA Republicans” would get out of the way.

Has he won them over? In a word, no.

In the most recent Winning the Issues survey (April 26-28), the president’s job approval on his handling of inflation was at minus 22 (with 34 percent approving and 56 percent disapproving). Digging deeper into voters’ views, the survey found Biden and Democrats are clearly losing the messaging battle on inflation. 

Biden’s signature bill, the American Rescue Plan, is seen as making inflation worse (46 percent) rather than better (22 percent) or having no impact (18 percent). As a result, issue handling on inflation has been trending in Republicans’ direction over the past year, with the GOP now up 15 points (48 percent, compared to 33 percent for Democrats).

Voters also did not believe that the president and Democrats will lower costs for working families and invest in strengthening the supply chain (40 percent believed, while 47 percent did not). Among independent voters, 29 percent believed, while 49 percent did not.

Voters did not believe that inflation has been going up because of the “Putin price hike” (38 percent to 47 percent), with independents also not believing this by a double-digit margin (27 percent to 50 percent). People do believe that Putin is a contributor to the current situation but not the primary cause, despite the White House’s attempt to pin the blame for inflation on Putin.

On the claim that Biden and Democrats will reduce the deficit, people just don’t buy it, with only 35 percent finding the statement believable, while 50 percent didn’t believe it. And independents were skeptical by more than 2 to 1 (21 percent to 55 percent). 

These numbers make it all the more surprising that the Biden team returned Tuesday to what has become a thoroughly discredited narrative on the economy and yet seemed to expect different results. Credibility has to be earned, and Tuesday’s speech, I suspect, will cost Biden believability, not bolster his numbers.

A White House fact sheet, released before the speech, put it this way: “While the federal budget deficit increased every year under President Trump — in part due to a reckless and unpaid for $2 trillion tax cut benefitting the wealthiest Americans and largest corporations — the deficit fell by $350 billion in President Biden’s first year in office because he prioritized rebuilding the economy from the bottom up and the middle out. And the deficit is now on track to fall by another $1.5 trillion this year.”

Contrary to what Biden is peddling, the 2017 tax cuts, in fact, are paying for themselves. According to The Wall Street Journal’s editorial board, the Congressional Budget Office found that federal receipts in 2021 were “at a record $4.05 trillion, an 18 percent increase over fiscal 2020 and the largest annual revenue increase in five decades.” This year so far? Up 39 percent. 

CBO also pointed out that individual income tax rates rose 27 percent, but not on the backs of the middle class or low-income workers, as Biden and congressional Democrats would have us believe, but because it “probably reflects higher total wages and salaries, particularly among workers with relatively high incomes who face higher tax rates.” As to the charge that the tax cuts benefited large corporations, again, the CBO said corporate income taxes rose 76 percent, from $212 billion to $372 billion. 

And the big drop in deficits has a lot more to do with the end of one-time COVID-19 expenditures than any Biden fiscal belt tightening. An honest analysis of Biden’s budgets going forward paints a far more negative outlook for both deficits and the debt.

Biden is a product of 50 years of Democratic economic theory, with its reliance on increased federal spending — an economic theory that got us the American Rescue Plan last year, putting inflation on steroids, a prediction former Treasury Secretary Larry Summers warned would happen. 

Ironically, Biden’s prescription for what ails the economy is really just old-school Democratic Keynesian economics wrapped up in nice, new green packaging — and people just aren’t buying it.

Tuesday’s speech was another swing and another miss. It may not be the bottom of the ninth, but time is running out for this president and his party. 

David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, as well as serving as an election analyst for CBS News.

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