During a speech on Thursday, President Biden criticized certain Republicans, identifying them as “extreme MAGA” for supporting policies that could increase taxes and inflation for middle-class Americans. Additionally, he emphasized his own record on the economy. The speech came shortly after the release of new economic data, which indicated that the economy had grown at a rate that surpassed expectations during the fourth quarter.
United States President Joe Biden highlighted the economic achievements of the Democrats and criticized the proposals made by Republican lawmakers to implement a national sales tax and reduce funding for Medicare and Social Security.#Biden #JoeBiden #Republicans #Democrats #US pic.twitter.com/kE9jJrlZBa
— News Live (@NewsLiveFree) January 27, 2023
President Biden spoke out against the Republican proposals, claiming they would increase gas prices, provide tax cuts for the wealthy, decrease Social Security and Medicare funding, and increase taxes for middle-class citizens. He also vowed to reject these proposals if they were to pass through Congress.
During his speech, President Biden specifically targeted the Fair Tax Act, a bill supported by Republicans. He warned that the proposed 30% national sales tax and eliminating most other taxes would ultimately lead to increased taxes for working and middle-class individuals. He also pointed out that the bill has a low chance of being passed, as the House Speaker, a Republican, has announced his opposition to it and the Senate, controlled by Democrats, is unlikely to approve it.
Democratic Party Concerns Over GOP-backed Legislation and Debt Ceiling Negotiations
Democratic Party representatives have argued that the legislation, supported by Republicans, that restricts the Biden government’s ability to trade oil from the Strategic Petroleum Reserve (SPR) would increase gas prices. Furthermore, they have expressed concerns that in negotiations surrounding the debt ceiling, Republicans might push for reductions to the funding of Medicare and Social Security, despite the House Speaker, a Republican, reportedly agreeing to retain those programs.
President Biden connected the Republican Party to former President Donald Trump, stating that the national debt had risen more drastically during his four years in office than under any other president. He also specified that significant portions of Republicans, between 30-40%, are “MAGA Republicans” who aim to create chaos and devastation.
The U.S. President referenced several key pieces of economic legislation passed during his office. These include the American Rescue Plan Act, which provided $1.9 trillion in funding to aid in the economic recovery of the country from the Coronavirus pandemic, and the Inflation Reduction Act, which aimed to lower the federal deficit, decrease the cost of drugs, and decrease carbon emissions among other objectives.
The President also emphasized the “strongest years of job growth ever in American history” during his first two years in office, mentioning that nearly 11 million jobs have been created, including 75,000 in the manufacturing industry. The decrease in unemployment under Biden’s tenure and the increase in the federal deficit under Trump’s tenure can be partly attributed to the Coronavirus pandemic, with the government’s debt growing significantly in 2020 due to Covid-19 relief programs, while job growth surged as the unemployment rate returned to pre-pandemic levels under Biden.
Low Confidence amid GDP Rise and Layoff Concerns
Over the past year, the economy has displayed mixed signals, with low unemployment but high inflation and a negative perception among Americans, as reported by Gallup’s Economic Confidence Index. Despite an unexpected increase of 2.9% in GDP for the last quarter of the previous year, reports of increased layoffs, reduced household spending, and the Federal Reserve’s efforts to constrain inflation by increasing interest rates have led experts to predict a potential decline in the economy in the coming quarter.
President Biden said he genuinely believes the current news could not be any better. He highlighted that the economy is seeing growth at a higher rate than anticipated, with a 2.9% increase. Additionally, he noted that employment is at a record high, and wages are rising faster than inflation. Furthermore, he pointed out that inflation has decreased each month over the past half-year.
On Thursday, President Biden delivered his first significant speech on the economy for the year, as Democrats have intensified their criticisms of Republican financial strategies. The previous day, House Minority Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer, both Democrats from New York, strongly criticized the Fair Tax Act, asserting that it would result in higher taxes for the majority of Americans and lower taxes for high-income earners.
Simultaneously, discussions are ongoing regarding increasing the federal debt ceiling, which reached its limit of $31.4 trillion last week and must be increased by mid-year to avoid government default on its debt, a situation that would have severe economic ramifications. The Republicans are advocating for cuts in spending in exchange for raising the debt ceiling. However, the White House has stated that it will not enter into negotiations on the matter.
Legislation Prohibiting Oil Exports from Strategic Petroleum Reserve
On Thursday, legislation will be presented to the House for evaluation which aims to prevent the Department of Energy from exporting oil from the Strategic Petroleum Reserve until a plan is created to expand fossil fuel production on government lands. With bipartisan support, a bill was passed earlier this month by the House that would prohibit the Department of Energy from selling crude oil from the reserve to companies linked to China.
The Democrats are opposing the bill being considered on Thursday, and it is unlikely to pass through the Democrat-controlled Senate and be signed into law by President Biden. The White House has also warned that the legislation would lead to oil shortages and higher gasoline prices during crises. The Biden Administration has been selling oil from the reserve to the highest bidder on the international market, including at least one company linked to China.