Treasury Secretary Janet L. Yellen on Thursday defended the Biden administration’s economic agenda and drew sharp contrasts with the Trump administration’s policies as President Biden began to make the popular election argument that he has been a stronger steward of the economy than his predecessor.
Ms. Yellen’s comments came after new data was released on Thursday that reinforced that message: The U.S. economy grew strongly last year, topping 3 percent and beating expectations of a recession. The strong numbers coincided with the White House’s efforts to improve the president’s economic record and send his top economic advisers around the country to prove his strategy is working.
Biden administration officials are trying to convince a skeptical public that while they are pessimistic about the economy, their performance will benefit the average American. Officials are expected to spend the coming months highlighting investments Mr. Biden has made in infrastructure, domestic manufacturing and clean energy projects.
In a speech at the Economic Club of Chicago, Ms. Yellen argued that the Biden administration has successfully navigated difficult headwinds caused by the pandemic and launched a recovery that has outpaced that of the rest of the world. She also noted that the Biden administration needs more time to address affordability issues, such as improving access to child care and housing.
“Our economic agenda is far from complete,” Ms. Yellen said.
The Treasury secretary also took the rare step of directly criticizing the policies of Mr. Biden’s predecessor and likely opponent, former President Donald J. Trump. She pointed to Trump’s repeated pledges to rebuild America’s roads and bridges and recalled how those promises have not been kept.
“Our country’s infrastructure has been deteriorating for decades,” Ms. Yellen said. “In the Trump administration, the idea of doing everything to fix the problem was a punchline.”
Ms. Yellen also criticized Mr. Trump’s tax cuts and criticized him for passing a 2017 tax law that she said enriched corporations, increased America’s budget deficit and did little to strengthen the economy.
“Past policies like the Trump administration’s Tax Cuts and Jobs Act added $2 trillion to the deficit without boosting investment,” Ms. Yellen said.
As a candidate, Mr. Trump has called for an extension of tax cuts that expire next year and the imposition of higher tariffs on imports. Under Mr. Trump, the United States imposed tariffs on more than $300 billion in Chinese imports.
Treasury secretaries tend not to wade into politics, but Ms. Yellen told reporters before her speech that she thought it was important to lay out the policy differences between the Trump and Biden administrations.
“I don’t get involved in politics,” Ms. Yellen said. “But tax policy is certainly something I am deeply concerned with, as is general economic policy. I tell Americans what the strategy is and why it’s the right strategy and why cutting taxes on the rich and hoping the benefits spread across the board “That’s not the right strategy.”
Ms. Yellen’s speech came as Mr. Biden traveled to Wisconsin to announce about $5 billion in infrastructure investments in a crucial swing state.
It remains unclear whether the administration’s efforts will resonate with voters, many of whom continue to give Mr. Biden poor marks on the economy. Although inflation has eased, Americans are still dealing with prices that are much higher than before the pandemic. The blame lies with Mr. Biden, and in a New York Times/Siena College poll in November of voters in six battleground states, 62 percent of voters who supported Mr. Biden in 2020 said they only thought the economy was “fair.” “hold” or “poor”.
Increased interest rates have made housing more expensive and the job market is expected to tighten this year as the economy slows. Economists are also watching for further disruption in energy markets as wars in Ukraine and Gaza continue to threaten trade routes.
Ms. Yellen acknowledged that while inflation was easing, more needed to be done to reduce costs. She said the government has worked to reduce the prices of medicines and energy.
“Although inflation has declined, prices for essential goods that are important to the American middle class remain too high, so we are taking additional action,” Ms. Yellen said.
While consumer sentiment has been hit by rising prices for months, recent indicators are showing signs of greater optimism. The University of Michigan’s preliminary survey for January showed an unexpected rise in consumer sentiment, pushing the index to its highest level since July 2021, before inflation spiked.
Commerce Department figures released Thursday showed the U.S. economy continued to grow at a healthy pace at the end of 2023, with inflation-adjusted gross domestic product growing at an annual rate of 3.3 percent in the fourth quarter.
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2024-01-25 22:45:45
www.nytimes.com
