President Biden speaks to members of the media today on the South Lawn of the White House. Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images
Team Biden is convinced that its State of the Union challenge tomorrow is as much about perception as reality.
Why it matters: Economic indicators are heading in the exact direction the White House predicted, but voters are deeply skeptical that the economy is working for them.
- Team Biden is eager for the president to tell his story and are willing to use one of his most precious resources — time in his annual address to Congress — to make the case directly to the American public.
- The White House has given lawmakers "palm cards," a list of economic data points that can fit in their hands, to help amplify President Biden's argument that manufacturing jobs are up and inflation is down.
- Four in 10 Americans say they are not as well-off financially since Biden took office, according to a Washington Post-ABC News poll released Monday.
- Biden’s political and economic advisers know that is a problem that needs to be addressed as he prepares to announce his reelection campaign.
What they're saying: “On average, American households are in a better position than they were before the pandemic hit,” Brian Deese, the director of the National Economic Council, told reporters Monday afternoon.
- But at the same time, he acknowledged that “the economic anxiety is real.”
- Deese responded to a question about why 41% of Americans feel they are worse off, according to the Washington Post poll, by implying that “two-thirds of Americans say their circumstances are better.”
- A reporter later corrected him that the poll indicated that 16% of Americans feel better off, with 42% saying they felt the same.
Driving the news: Biden’s economic comments will be both in the future and past tense.
- He’ll focus on the progress the economy has made, including a 3.4% unemployment rate, the lowest level in some 50 years, and a surge in manufacturing jobs.
- He'll also go through the motions of asking Congress, including a new House Republican majority, to pass the parts of his Build Back Better agenda that were left on the cutting room floor last year by a Democrat-controlled Senate.
- Among Biden’s demands: a special surtax on billionaires and a call to quadruple taxes on corporations for stock buybacks.
- He'll also make another pass at expanding the Child Tax Credit.
As part of his “unity” theme, Biden also plans to say that Republicans and Democrats must come together to pass laws meant to reel in the power and influence of Big Tech, possibly highlighting the specific areas of online privacy, content moderation and antitrust, Axios' Ashley Gold reports.
The big picture: The U.S. labor market is hot, annualized GDP growth is at 2.9%, and inflation, once sky high, is moderating.
- Biden’s first move was a $1.9 trillion COVID relief package in 2021, followed by a $1.2 trillion infrastructure bill later that year.
- In 2022, he persuaded Sen. Joe Manchin (D-W.Va.) to agree to a $740 billion tax, health care and climate change compromise.
- Next came an agreement on $280 billion for semiconductors, with Biden jumping at any chance to visit many new chip manufacturing factories.
The bottom line: Positive perceptions about the economy can be self-fulfilling.
- But economic fundamentals also matter: Before Biden speaks tomorrow evening, Fed Chair Jay Powell will give his views at the Economic Club of Washington at 11am ET.
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