Economic success story

Biden’s economic success story could fall flat among people still struggling

Joe Biden is ready to hype his economic success story. But inflation and other market factors could spoil the tale.

By ADAM CANCRYN

The White House finally believes it has an economic story worth telling. Now, it’s trying to figure out how to get voters to listen.

Emboldened by a string of legislative victories, President Joe Biden has leaned into his record on the economy, increasingly confident that the nation’s outlook is brightening after months under a cloud of rising prices and consumer anxiety.

Wages are up, gas prices are down, the thinking goes. And following a year of fits and starts, Biden clinched congressional deals aimed at reshaping major parts of the U.S. economy — and cementing elements of his own presidential legacy.

But just as the White House was rushing to capitalize on its winning streak — in hopes of turning around an economic narrative that has dogged the administration from its earliest days — complications have arisen. The lengthy fall in gas prices finally ended, inflation has stayed stubbornly high and a bleak global economic landscape has rattled the markets, with both the Dow Jones and S&P 500 nearing their weakest levels of the year.

The cross currents of economic and political news have left the White House in a tricky position. After spending much of his term battling inflation and fears of a recession, Biden has begun traveling the country touting long-term investments in manufacturing and climate. And among White House advisers and allies, there’s even optimism that an economic record that once weighed on congressional Democrats’ political prospects could help keep many of them in power.

“Legislatively, the last 90 days have been nothing short of amazing — that’s just a fact,” said Robert Wolf, an Obama-era economic adviser who maintains ties to the Biden White House. “We have to be really feeling good about what’s taken place.”

Yet alongside that enthusiasm, the turnaround has also sparked urgent questions about how far Democrats should go in celebrating their economic agenda. Though key contributors to inflation have slowed, the cost of staples like food and housing remain elevated. The grinding war in Ukraine means gas prices could spike again too. And the Federal Reserve’s aggressive attempts to ease inflation are prompting fresh worry that its tactics will steer the economy right into a recession.

That uncertainty has thrust Democrats into a delicate moment six weeks ahead of the midterms. They’re eager to go on offense over an economy that’s shown some enduring signs of strength — but wary of making voters still buried by high prices feel like they’ve been left behind, especially when there is substantial risk that the gains could soon be shattered.

“You can’t pivot away from the obvious,” said James Carville, the longtime Democratic strategist, of the inflationary challenges that have hung over Biden’s presidency. “You have to talk about how you’re trying to help people deal with the rise in the cost of living.”

In recent weeks, Biden advisers have counseled Democrats to counter skepticism about the economy by playing up specific signs of strength, such as continued wage growth and job gains in the manufacturing sector, people familiar with the discussions said. They’ve emphasized there’s little belief within the White House that the U.S. is on the verge of a recession.

The administration has also sought to broaden voters’ view of Biden’s economic record to include longer-term initiatives such as fighting climate change, lowering prescription drug prices and boosting global competition — friendly territory that steers away from concerns about the stock market and everyday costs.

But Biden officials have also cautioned that the White House can’t paper over its economic challenges completely, especially after an unexpected increase in inflation earlier this month shook confidence inside and outside the administration. Instead, they’ve advised Democrats to hew to the admission that inflation remains “unacceptably high” and avoid making bold predictions that conditions will soon improve.

“There is uncertainty, and we should be humble about that,” National Economic Council Director Brian Deese said on CNBC last week, after automaker Ford rattled the markets by disclosing an extra $1 billion in inflation-driven costs.

The administration’s increasingly optimistic engagement on economic issues has nevertheless cheered many Democrats on Capitol Hill, who found themselves frustrated at points earlier this year by the White House’s struggle to find its footing as gas and food prices skyrocketed.

After repeated complaints to administration officials that they weren’t proactive enough in laying out a defined game plan to shield Democrats from GOP attacks, one Democratic lawmaker said, the “messaging has gotten much better” of late.

Other Democrats said the reason for the new tone was simpler. After passing Biden’s long-sought Inflation Reduction Act in August, the party simply had something to talk about other than the latest inflation readings.

Yet there’s still underlying trepidation about trumpeting the state of the economy too loudly, especially with many voters still seeing their expenses eclipse their pay gains.

Biden’s dismissal of a tick upward in the Consumer Price Index in August as “just an inch, hardly at all” during a recent “60 Minutes” interview caused some Democrats on Capitol Hill to wince. Lawmakers have also pressed the administration to seek new ways to cool housing prices, warning that their constituents are growing increasingly vocal about the issue.

“I’m very proud of the accomplishments that the president has articulated,” said Rep. Haley Stevens (D-Mich.), crediting Biden’s policies for steering the country out of 2021’s pandemic-induced recession. “But you can’t force people to feel something.”

Even the most bullish Democrats acknowledge that another economic setback could be waiting around the corner.

Administration officials have kept a close eye on oil prices for signs of rebound as they celebrate the declining cost of gas at the pump. The unemployment rate is unlikely to stay glued near historic lows for an extended period. And as the Fed tries to curb inflation, Chair Jerome Powell allowed that “no one knows whether this process will lead to a recession.”

But for now, Biden and his allies are focusing on the present — and hoping the current signs of progress will buoy the party into November.

“We’re at this fork in the road where half the economists think we’re going into a recession and half the economists think we’re not going into a recession; half the economists think inflation has peaked and half the economists think inflation is here for a while,” Wolf said. “Gas prices are going to fluctuate and the labor market is going to fluctuate. But you can only say where we are today.”