Biden’s economic gamble

Photo illustration: Sarah Grillo/Axios. Photo: Tom Brenner/Bloomberg via Getty Image

President Biden is gearing up for re-election with a relentless, aggressive focus on the economy – confident of the data cuts in his favor, even as large sections of the public remain skeptical that conditions have improved.

Why it matters: It is a high risk, high reward strategy.

The Gamble: If GDP holds steady and record unemployment stays low, Biden plans to lead a healthy economy into a second term.

• But if the economy slips into a deep recession before November 2024, the president will have expended valuable political capital calling for credit when voters might be more inclined to assign blame.

Driving the news: Biden, who has made no formal decision to seek re-election, will take his message of economic optimism to Virginia Beach on Tuesday, where he will also be pounding on Republicans for wanting to overturn his inflation-reducing signature bill.

• His argument: Republicans plan to increase health care bills for millions of Americans.
• Next week, Biden’s 2024 budget will take center stage, and he will emphasize his plans to cut deficit spending by $2 trillion over 10 years.
• Biden will continue to ask House Republicans to submit their own budget and indicate which programs, if any, they plan to cut.

What you say: “We are very proud of the 12 million jobs that have been created since the president took office,” Bharat Ramamurti, deputy director of the National Economic Council, told Axios.

• “We think the underlying numbers on consumer spending and business investment are also positive,” he said. “They show that people have a lot of confidence in their financial situation and where the economy is going.”
• “As we’ve always said, we expect there will be some bumps on the road to steady and stable growth.”

Using the numbers: In addition to the 12 million jobs added to Biden’s economy, officials like to highlight the 3.4% unemployment rate, which is a 50-year low.

• The economy expanded an annualized 2.7% in the fourth quarter.
• Biden takes the record 10.5 million small business applications in his first two years as an individual vote of confidence in his handling of the economy.

The other side: Republicans continue to attack Biden over the cost of basic necessities and believe the public shares their skepticism about Biden’s economic record.

• A Fox News Sunday poll shows that 62% of respondents disapprove of Biden’s handling of the economy, while 36% approve of him. 66% reject inflation and 31% agree.
• Those numbers echo a Washington Post-ABC News poll from late January, in which 41% of Americans said they weren’t doing as well financially as when Biden took office. 16% said their prospects have improved.
• Last Friday’s data showed that consumer spending and inflation picked up again in January, suggesting a more serious economic slowdown is needed to bring prices down.

Between the lines: In a divided government, Biden doesn’t really control the speed or direction of the economy.

• The fate of the economy rests largely in the hands of the Federal Reserve, which remains concerned about inflation and is likely to continue raising interest rates to slow the economy.
• But Biden has ways to control perceptions of the economy and who gets the credit — or blame — when things go up or down.