U.S. President Joe Biden will present a $ 6 billion budget proposal for the next decade, doubling his plans for large-scale government investment in the economy with a stake that l inflation will decline after this year’s operation.
The White House budget is scheduled to be released Friday after the U.S. president travels to Ohio Thursday to defend the administration’s economic records and reject Republican criticism that higher prices and labor shortages are already straining. the recovery.
“With the pandemic retiring, our economy is booming: 500,000 new jobs are created each month on average, new unemployment claims are declining by almost half, and record growth is ahead of us,” said Mike Donilon, one of Biden’s chief aide, he wrote in a note Thursday morning before the trip to Ohio.
The Biden administration’s confidence in its economic strategy has been challenged in recent weeks by data showing a unexpected wave in April consumer prices, accompanied by slow growth in employment due to shortcomings in recovery labor market. This sparked an attack of criticism from Republicans that excessive spending brought America back to the stagflation era of the 1970s.
But senior government officials have argued that price and employment disruptions were a feature of a rapidly reopening economy that would be resolved relatively soon.
“The recent inflation we are seeing will be temporary, not something that is endemic,” Treasury Secretary Janet Yellen told members of the House Appropriations Committee on Thursday. “I hope it will last a few more months and see high annual inflation rates until the end of this year.”
Following this year’s jump in economic activity, the Biden administration is moving forward with plans for additional investments worth $ 4tn for a decade – both in physical infrastructure and in social spending – in addition to almost $ 2tn in short-term stimulus to fuel long-term recovery and correct what it sees as major structural defects in the U.S. economy.
But those hopes are dashed negotiations with Republicans and Democrats on Capitol Hill. Meanwhile, the White House hopes that higher inflation will be associated with improved wages for many workers while companies seek to attract employees to the workforce with better wages, particularly for low-income families.
Whether Biden’s economic policies are considered a success or a failure could be crucial to Democratic hopes of maintaining or expanding its majorities in Congress in the mid-term elections next year. In Thursday’s memorandum, Donilon said that, based on the vote, he also believes the public supports many of the president’s proposals, even in the face of growing Republican opposition.
“When Republicans criticize the president’s plan to rebuild our economy through long-standing investments in our country’s infrastructure, they criticize what its members have been organizing for decades,” he wrote. “When they attack the president’s plan to make the rich finally pay their share of the taxes, they attack the basic sense of equity of the American people.”