WASHINGTON — Hours after insisting the US was not in a recession, President Biden appeared to change his tune Thursday, claiming that Americans feel “so down” about the state of the economy and that “there’s reason to be down” due to high inflation and the lack of generous COVID-19 aid.
“I look at it, and I take it very seriously, the confidence level of the American people on the economy, and they’re so down and they’re looking,” Biden said at an afternoon summit with the CEOs of Bank of America, Marriott and other large companies after the Bureau of Labor Statistics found that US GDP shrank over consecutive quarters this year. “There’s reason to be down, but I started thinking about it.
“You know, the first year we were able to, with the Rescue Plan, we were able to send them a check for eight grand,” the president continued, referring to the $1.9 trillion American Rescue Plan Act that Democrats passed last year without Republican support.
“If you’re making 120 grand and you get a check for eight grand, that’s a lot of money. and so it helped save a lot of people, in terms of getting thrown out of their homes and rental housing and a whole range of things,” Biden went on.
The president then posited that this year, there’s no direct government assistance to most Americans, making it feel like life is harder even if more people are working and winning pay raises.
“I started thinking about it just as someone who was raised as a middle class kid, one year, even though you didn’t have the job you had now, even though you didn’t get a raise that year,” he said.
“The difference between having a job and having a 5% raise or whatever — 3, 5, 7 , whatever it happens to be — in the face of inflation, the price of the pump, although that’s down every day so far — but you know, it’s like, ‘Whoa, I feel worse off’,” Biden added.
“‘But then again, I didn’t get a check for eight grand from the government, among other things.’ Does that make sense to anybody or is it just me?”
Republicans say that the American Rescue Plan Act helped fuel inflation by giving out so much money without financial offsets. The annual inflation rate of 9.1% in June was the worst since 1981 and effectively eliminated the average wage gains of US workers.
The $8,000 figure Biden referenced appeared to encompass $1,400 individual stimulus checks and a temporary boost in the annual child tax credit.
Biden then griped that the public didn’t understand the positive impact of that legislation.
“It’s interesting and totally understandable why the vast majority of the American people have no idea what the recovery plan did, what the government did at all,” Biden said. “The reason why we still had teachers in school, kids going to school, the reason why we had cops on the beat, the reason why we had essential workers — states couldn’t afford it, cities couldn’t afford it … so we came up with this Rescue Plan and gave them billions of dollars.”
A study released in late March by researchers at the Federal Reserve Bank of San Francisco said that in the final quarter of 2021, about 3 percentage points of US inflation — roughly half the annual rate at the time — may have been caused by elevated government spending during the pandemic, including the American Rescue Plan Act.
Although Biden generally rejects blame for inflation, in one instance he conceded that the American Rescue Plan Act likely had some effect on rising prices.
“The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,” Biden said, adding, “It changes people’s lives. But what happens if there’s nothing to buy and you got more money to compete for getting [goods]? It creates a real problem.”