Biden’s new ‘transition’ economy is just ‘Build Back Better 3.0’

His plan to fight inflation isn’t fooling anyone

President Joe Biden can write all the Wall Street Journal op-eds he wants, but that doesn’t mean he has a real plan, Winston writes. Above, Biden meets with Federal Reserve Chair Jerome Powell on Tuesday. (Saul Loeb/AFP via Getty Images)
President Joe Biden can write all the Wall Street Journal op-eds he wants, but that doesn’t mean he has a real plan, Winston writes. Above, Biden meets with Federal Reserve Chair Jerome Powell on Tuesday. (Saul Loeb/AFP via Getty Images)
Posted June 1, 2022 at 6:00am

If President Joe Biden’s opinion piece in The Wall Street Journal on Monday — Memorial Day — seemed oddly timed, its content seemed oddly out of touch with reality, despite months of nearly Herculean rhetorical efforts to brand and rebrand his economic policy from "Build Back Better" to, now, the newly coined “transition” economy.  

Biden begins his latest attempt to change the economic narrative with an obligatory moment of empathy with the plight of the American people, a classic “lunch bucket Joe” talking point he’s been dishing out for decades.  

He then quickly pivots and sets out down a familiar path of what can only be described as a series of gratuitous claims. Topping the list of “accomplishments” is what he calls “the most robust recovery in modern history,” brushing off record high inflation, skyrocketing gas and food prices and abysmal poll numbers like flies at a backyard barbecue.  

He claims that he engineered the “fastest decline in unemployment on record,” conveniently forgetting that the country is still 1.19 million jobs short of where we were prior to the pandemic. Bringing back jobs isn’t quite the same as creating new ones, which a growing economy needs.  

But Biden doesn’t stop there. To justify his out-of-sync economy, he simply tries to redefine the whole idea of growth, telling people to see lower job-creation numbers in the months ahead — going from 500,000 jobs a month to a more reasonable 150,000 jobs a month — as a positive.  But not to worry, he says, fewer jobs isn’t a “cause for concern.”  

Biden actually claims that slower job creation is a “sign that we are successfully moving into the next phase of recovery,” the Biden administration’s transition economy. Translation: Lower your economic expectations for the future and accept the new normal.  

Only in Biden’s world is slower job creation a good thing.

Biden does acknowledge that inflation is still a problem. He goes on to outline a new three-point plan to deliver “stable, steady growth.” That, with the “right policies,” will bring down inflation. In part one, Biden tosses the hot potato of inflation where he says it belongs — with the Federal Reserve. Not my responsibility, says this president, and he promises not to interfere with the Fed. Less than 24 hours after his op-ed appeared, the president met with Fed Chair Jerome Powell.  

Part two of his plan focuses on what he says is making “things more affordable for families during this moment of economic uncertainty and to boost the productive capacity of our economy over time.” Wait. What happened to his historic economic recovery?  

As he and his spokespeople have done many times before, Biden blamed Russian President Vladimir Putin for rising gas prices while boasting that he led the “largest release from global oil reserves in history.” To date, this has had no impact on the price of crude or gas at the pump. Once again, Biden calls on Congress to pass his clean energy tax credits and investments, which he claims would save the average American family $500 a year and get us out from under the thumb of energy “autocrats.”  

Given the impact of Biden’s green energy policies on energy inflation so far, it’s not likely anyone but the Green New Deal crowd is going to buy that statement. He follows up with a laundry list of promises on everything from the cost of drugs to the cost of child and elder care but offers few solutions to any of the problems he cites.

Finally, in the third part of his plan, Biden returns to his most deceptive claim of all — that it is his policies that are responsible for the projected $1.7 trillion decrease in the deficit this year.

Here’s the actual breakdown, according to the Congressional Budget Office:

“In CBO’s projections, total federal outlays decrease by $1.0 trillion in 2022. The decline in 2022 is dominated by a $1.1 trillion drop in estimated mandatory spending — the result of sharply lower pandemic-related spending — to $3.7 trillion this year.”

In English, that means most of the deficit decrease has nothing to do with Biden or his policies and everything to do with winding down COVID-19 relief expenditures and increased revenues. 

The CBO projects that overall revenues as a percentage of GDP this fiscal year will hit 19.6 percent — the highest since 2000 (20 percent). Looking at projected income tax revenues as a percentage of GDP, CBO says that, at 10.6 percent, “that total is expected to be the highest amount of individual income tax receipts recorded since 1913, when ratification of the Sixteenth Amendment authorized the federal government to begin collecting income taxes.” 

That increase wasn’t Biden’s doing either. That credit belongs to the 2017 tax cuts that produced one of the strongest economies in recent memory and are delivering the revenues helping to cushion the impact of the pandemic on the U.S. economy. 

So, are people buying Biden’s claim that his economic and vaccination plans brought about “the most robust recovery in modern history” or his plans for a new transition economy? Are they giving his economic policies credit or blame for the current state of the U.S. economy?  

In the May 25-26 Winning the Issues survey (WTI), people were asked whether they thought his economic policies were correct or incorrect. By a 35 percent (correct) to 51 percent (incorrect) margin, people said “Bidenomics” were incorrect. Among independents, the margin was worse, at 23 percent correct, 52 percent incorrect.

The survey also tested Biden’s job approval on handling inflation. Overall, 33 percent of voters approved of how Biden is handling inflation, while 59 percent disapproved. The margin with independents was a staggering 17 percent approved, 67 percent disapproved.

The mistake the Biden team is making is not uncommon in the political sphere on both sides of the aisle. It believes that winning is all about the messaging, not outcomes.  

If Biden’s op-ed this week or almost any of his economic statements over the past six months are any indication, this White House is operating under the illusion that its problem lies with the narrative, not the reality that its policies are more likely to make inflation worse, not better.  

Words don’t always work, and neither do bad policies that are out of sync with most Americans. A change in direction might help, but that would require a different kind of transition than the one Biden is peddling this week — a transition to new ideas.  

Not likely.

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.