Fed and White House combine for day that gets to the heart of Biden's political problem |  CNN Politics

Fed and White House combine for day that gets to the heart of Biden’s political problem | CNN Politics



CNN

On Wednesday, two Washington power centers will expose the politically toxic dynamics of the top economic issue threatening President Joe Biden’s congressional majorities with the midterm elections less than a week away.

The Fed is likely to trigger another historic interest rate hike and, about half a mile from the White House, Biden will host an event to highlight the administration’s extensive efforts to grow the workforce in critical areas such as broadband and construction. A policy decision is expected to ripple through markets, media and politics, shining a direct spotlight on an issue that Democratic officials say has significantly hurt their political prospects. The other will detail an intensive administrative effort to reshape the pipeline for entering professions over time.

The difference between the two events, in the compressed political calendar that Democrats are now scrambling to reset, is stark.

The federal program to train Americans and create a strong pipeline of skilled workers who can work in specialized fields is, officials say, part of a long-term solution to address labor shortages – one of many drivers of persistent inflation that remains at nearly four-decade highs.

The Fed is ready to continue its months-long acceleration to rein in an economy turning red.

Biden’s White House event and speech are sandwiched between midterm campaign trips — he was in Florida on Tuesday and is expected to head west to New Mexico on Thursday.

His efforts to fight inflation, both through major legislation and a series of executive actions to reduce the cost of living, are a hallmark of Biden’s stump speech.

“Democrats are cutting your day-to-day expenses like prescription drugs, health care premiums, energy bills and gas prices,” Biden said in remarks at Democratic National Committee headquarters last month.

The administration’s unprecedented actions to lower gas prices, centered on the release of 180 million barrels of oil from the Strategic Petroleum Reserve over the past seven months, also figure prominently.

But implicit in Biden’s speech is the difficulty the overarching problem presents as the clock ticks down to the day the votes are counted. The scale of the problem has been made increasingly clear by the hawkish approach pursued by the Fed, but perhaps most critically by the aggressive tone of its chairman, Jerome Powell.

“We want to act aggressively now and do this job, and keep going until it’s done,” Powell said at his September press conference.

Biden and his top advisers have continued a deliberate effort to reframe the debate as a choice between the two parties instead of a referendum on Democratic control of Washington.

“It’s not your dad’s Republican Party, it’s a different deal right now,” Biden said at an event in Florida on Tuesday. “And there are a lot of good Republicans out there, but they’re under a lot of pressure.”

But as Republicans hammer the economy with millions of dollars in election ads, the entrenched nature of the political problem has remained.

Biden faces Russia’s war in Ukraine that has rattled prices in energy markets. The global economy also faces the ongoing challenge of Covid infections, supply chain constraints, social unrest and political instability. Still, U.S. consumers have shown few signs of cutting spending — and the U.S. labor market remains robust.

Biden, as he deviated from his prepared remarks at an event last week, hinted at an issue White House officials have long seen as hanging above everything: exhaustion.

“I just think one of the things that I think frustrates the American people is that they know the world is in a bit of disarray,” Biden said, directly highlighting the uncertainty this year caused by the Russian invasion. “And they want to know what we’re doing?” And there’s a lot going on that we do.

Billed by the White House as the “Infrastructure Talent Pipeline Challenge,” Biden will showcase private and public sector efforts to train workers in three sectors in particular: broadband, construction and electrification. Unionized workers will make presentations on how they train employees in these areas, and the president is expected to talk about new and existing efforts to train additional workers.

White House officials see it as the tangible result of three fundamental legislative victories, which laid the groundwork for a sea change in the long-term infrastructure of the US economy. All three – the bipartisan Infrastructure Act, as well as a law boosting US manufacturing of semiconductor chips and a $750 billion health care, tax and climate bill – will be highlighted during Wednesday’s event and remarks.

Still, Biden’s economic team has worked tirelessly for months to find policy options to ease the burden of soaring prices, even as hopes of a steady decline ahead of the election have been dashed.

Despite being extremely careful not to make economic forecasts, officials in the spring saw a path to a sharp deceleration in prices by the fall – something that would have been a key part of their economic pitch before the last weeks of the campaign.

Instead, they’re stuck watching the rapid acceleration of Fed efforts that have rattled markets and some companies’ hiring plans, inflation that remains stubbornly high and barely mobile, and an American electorate that is registering pure and simple frustration in large majorities.

The fact that Biden’s major policy victories were designed to tackle many of the pandemic-era drivers of the current inflationary moment — and yet all will take time to implement — only serves to lay the frustration bare. felt by many advisors as they currently face.

Biden’s White House legislative achievements are concrete and significant — and the future they portend, officials say, aligns in many ways with the proposals Biden campaigned on. Private sector investment pouring into the United States to the tune of tens of billions of dollars only serves to bolster the merit of the effort, officials note.

Yet with less than a week to count the midterm votes, Biden — and his party — remain at the political mercy of a problem they have no tools to immediately control, stuck staging events at the White House highlighting policies that will take root over time.

Meanwhile, the Fed — and its spectacular and relentless efforts for months to control inflation — will remain in the spotlight as undecided Americans make their final voting choices.

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