Last week, the White House attempted to define its economic vision in a 58-page report titled “The Biden-Harris Economic Blueprint.” One first notices the report’s sloppiness. Five footnotes supposedly sourcing the White House data include in bold letters: “Error! Bookmark not defined.” There is also awkward repetition, such as cutting-and-pasting “the strongest and most equitable labor market recovery in modern history” in paragraph after paragraph (eventually getting excited enough to remove the word “modern,” allowing the president to also declare superiority over all ancient economic recoveries).
The most revealing aspect of the White House economic vision is what is not included: inflation or deficit reduction.
Sure, the introduction declares that “President Biden’s top economic priority is bringing down inflation and lowering costs for families . . .” yet none of the report’s “five core pillars” focuses primarily on combatting inflation, which remains incredibly high — 8.3% in August.
In fact, the report repeatedly brags about policies that worsen inflation. This includes mandating Project Labor Agreements and Davis-Bacon prevailing wage rules (union giveaways that raise costs for federal projects), and expanding federal Buy America rules that bar federal agencies from buying cheaper imports. The White House even trumpets its mandate applying expensive Davis-Bacon regulations to semiconductor manufacturers in the CHIPS Act — contradicting the bill’s purpose to lower production costs and spur domestic semiconductor production.
The White House report also laments the rising cost of college tuition, yet also brags about steep increases in Pell grants and college student aid that (according to the Federal Reserve) leads colleges to hike tuition further to capture 60% of all student aid.
If bringing down inflation is really the president’s top economic priority, we do not see that in his policies.
Nor does the White House report express any concern over trillion-dollar budget deficits. In fact, the only mention of deficits appears in a throwaway line touting the 2022 deficit decline that was entirely driven by rising tax revenues and the pandemic spending expiring on schedule, rather than any presidential actions.
President Biden’s laws such as the American Rescue Plan, infrastructure bill, veterans’ bill, CHIPS act, appropriations bills, and student loan bailouts have cumulatively added more than $4 trillion to 10-year deficits in just 20 months. And that is on top of soaring baseline deficits that are scheduled to push interest costs on the debt to a record 3.3% of the economy within a decade. Most of the 58-page plan boasts about all the wonderful new benefits purchased on the national credit card, and offers no plan to stem the tide of red ink.
The White House report also repeatedly, and breathlessly, takes credit for an economic recovery that resulted overwhelmingly from the pandemic receding rather than any presidential policy. The “key accomplishment” of creating 9.7 million jobs stems mostly from the economy reopening following the pandemic. The “decline of more than $1.20 in gas prices this summer” of course fails to mention the $2.61 price rise that had occurred earlier under President Biden.
In what is certainly news to Republicans, as well as America’s governors, mayors, and public health officials, the report claims that “The Biden-Harris Administration also took decisive action to open America’s schools safely.”
There seems to be few positive developments in America for which the president will not demand full credit.
The report also offers lazy economic analysis that has long been refuted. This includes posting a chart claiming a substantial split between worker pay and productivity that economists on the left and right (including Lawrence Summers) have long disproven.
The report bemoans falling tax revenues, even though 2022 tax revenues are set to reach 19.6% of the economy (the second highest level since World War II), driven by individual income tax revenues surging to a record 10.6% of the economy. Several charts attempt to show insufficient business tax revenues by including only corporate tax revenues, and ignoring the taxes paid by small businesses through the individual income tax code. The White House repeats the dubious claims that families earning under $400,000 have been spared from all new taxes, and that the $80 billion in new IRS funding will not bring more middle-class audits.
With Americans suffering under painful inflation, declining real wages, and a falling stock market, the White House clearly feels pressure to justify its economic performance. They’ll have to do better than the latest spin.
Brian Riedl is a senior fellow at the Manhattan Institute. Follow him on twitter @Brian_Riedl.