Biden's June agenda: convince Americans the economy is healthy

[June 01, 2022]  By Trevor Hunnicutt and Howard Schneider

WASHINGTON (Reuters) - President Joe Biden is planning a media blitz to lift his sagging opinion poll numbers before November's congressional election, promoting his management of America's recovery from the coronavirus pandemic and efforts to cool spiraling inflation.

Biden's meeting with Federal Reserve chair Jerome Powell to discuss inflation on Tuesday was the first event in a multi-week agenda, a White House official said.

Through June, the official said, the White House plans to emphasize the historic levels of job creation and low unemployment rate seen through Biden’s first 17 months in office, his pledge to respect the Fed’s independence and coming efforts to “put more money in the pockets of working families."

Biden will speak on the jobs numbers on Friday, and Cabinet members including Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo and economic advisers Jared Bernstein and Heather Boushey plan dozens of television spots and other in-person events.
 

The prospects for Biden’s Democratic Party to maintain control of Congress in the Nov. 8 election may hinge on how successfully he can craft a positive economic narrative around what has become an increasingly sour mood.

On the surface, working families have been doing well.

Unemployment is at levels more akin to the boom years of the 1950s and 1960s, wages for many lower-skilled occupations are rising, and bank accounts, on average, are still flush with cash from coronavirus support programs. Recent Fed reports and surveys reported households on average in a strong financial position.

But confidence has waned, and in a recent Reuters/Ipsos poll the economy topped respondents' list of concerns. Biden's approval rating has fallen to 36%, the lowest of his presidency.

Inflation has hit a 40-year high, persisted longer than policymakers expected when it first rose last year, and in recent months has prompted the Fed to unleash what may prove one of its fastest ever efforts to tighten monetary policy.

The opposition Republican Party, enmeshed in a civil war over former President Donald Trump's 2020 election falsehoods, has united around hammering Biden on inflation.

U.S. President Joe Biden meets with New Zealand Prime Minister Jacinda Ardern in the Oval Office at the White House in Washington, U.S., May 31, 2022. REUTERS/Leah Millis

"What the Democrats have to do is resist the urge to explain how inflation got caused and just go completely into like, here's what we're gonna do about this," said Rodd McLeod, a Democratic political consultant in Arizona, a state that can swing toward either major party.

Responses to a commentary that Biden wrote about his inflation-fighting plans in the Wall Street Journal Tuesday underscored the size of the challenge he faces.

By mid-day, the vast majority of more than 1,000 comments in one of the country's few national newspapers dismissed the prescription drug pricing and clean tax credit plans Biden laid out, while advocating instead for lower taxes and more oil drilling and dismissing Biden's ideas as fiction.

Taming inflation will require not only adept central bank decision-making, but no small degree of luck. Global prices are buffeted by such events as the Ukraine war and the coronavirus pandemic, and whether another surge could tamp down China manufacturing again.

The best case for Biden at home is that tighter Fed monetary policy slows the economy just enough that spending cools, and companies cut back on job openings without actually cutting into jobs.

The alternative, should the Fed find inflation more persistent, is for the central bank to move interest rates so high the economy tips into recession with a significant rise in unemployment. September is expected to be a pivotal month, with the Fed expected to take stock and decide whether to become even more aggressive.

(Reporting by Trevor Hunnicutt; Writing by Howard Schneider; Editing by Heather Timmons and Howard Goller)

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