A blockbuster jobs report. A hot stock market. And now, another report confirming inflation eased last year. Democrats are poised for an economic victory lap.
But don’t expect Republicans on Capitol Hill to stop hammering President Joe Biden on the economy. They continue to push back — hard — as they did Thursday when Treasury Secretary Janet Yellen appeared before the Senate Banking Committee to tout the improving economic picture.
“Some prices will be higher than they were before the pandemic, and will stay higher — but wages have risen considerably,” Yellen testified. “We don’t have to get the prices down, because wages are going up.”
Republicans aren’t buying it. “We don’t?!” an incredulous Sen. John Kennedy (R-La.) responded to Yellen’s assertion.
In more than a dozen interviews, congressional Republicans argued that Democrats’ efforts to downplay the high costs Americans continue to pay for everyday items like groceries, energy and housing shows just how out of touch they are. Even as the broader U.S. economy trundles upward and the latest economic release reaffirmed prices of key consumer goods generally eased last year, GOP lawmakers are betting that those costs will remain a burden for low- and middle-income voters — even if they’ve come down from the heights of the pandemic, as Biden and Democrats regularly point out.
“Inflation is cooling down, no doubt. But prices have gone up on everything,” Rep. Dan Newhouse said, a more centrist-leaning Republican who represents a rural stretch of central Washington. And those elevated prices for key consumer goods are “not going to come down” to pre-pandemic levels, Newhouse added.
“The aggregate of inflation in the last few years is still higher than what middle-class America is able to afford,” Sen. Kevin Cramer (R-N.D.). “They just aren’t seeing it.”
In fact, many Republicans said that Biden is doing himself a disservice by touting a thriving economy when many Americans have yet to experience significant improvement first-hand.
“When you actually get out of this bubble here in Washington, and talk to people back home, what they really feel is … everything’s still more expensive,” Sen. Eric Schmitt (R-Mo.) said. “So this disconnect between Biden going around talking about Bidenomics, and then people at home are saying, ‘Well, wait a minute. Things are still really expensive for me’ — I think that’s the fundamental problem that Democrats have in trying to sell this.”
So far, it’s a growing talking point for the president and Democrats on the campaign trail. Biden recently proclaimed that the U.S. economy “is the strongest in the world” amid recent surges in consumer sentiment, unemployment dropping below 4 percent for two full years — the longest stretch in half a century — and inflation falling to 2 percent over the last six months.
“While Republicans vacillate between denying the reality of a strong economy and trying to take credit for it, President Biden is building our economy from the middle out and bottom up,” White House spokesperson Michael Kikukawa said in a statement. “The results speak for themselves: 3.1 million jobs created last year—more than any year under the previous administration, a record 16 million small business applications, gas prices under $3.00 at most gas stations, the stock market reaching all-time highs, and wages rising faster than inflation.”
That upturn in consumer sentiment isn’t yet reflected in the presidential race, however. A recent NBC poll found Biden trails former President Donald Trump by 20 points when voters are asked which candidate would better handle the economy.
And even White House officials privately acknowledge food inflation isn’t falling fast enough from its pandemic peak, which they fear will continue to drag down voters’ outlooks of the economy ahead of this fall’s elections. Biden recently noted on the campaign trail that he’s pressing corporations, like major grocers, to pass on their savings to consumers. White House officials also note the administration has increased food benefits for millions of low-income Americans, including children, to help blunt the financial toll of higher grocery prices.
Mortgage rates have been similarly slow to fall. Gas prices, down dramatically from their crushing 2022 peak, have started to edge up recently. Republicans say they plan to draw the connection between those trends and Biden’s domestic spending and energy policies.
“You’re talking about a two-year time period in which people in South Dakota are paying $10,000 more a year just for normal living expenses,” Sen. Mike Rounds (R-S.D.) said in an interview. “It’s not going down. It just simply isn’t going up as fast as it has for the last two years. So that is something that he can’t get away from.”
Republicans have also noted lingering red flags in some of the recent economic reports Biden has touted. That includes a decline in the average number of hours Americans are working and still-weak workforce participation rates, both of which can be an early sign of a recession.
Rep. John Duarte (R-Calif.), a vulnerable Republican who represents a blue district, said his agriculture-heavy district in California’s Central Valley “is still struggling.”
“Working families here are looking for work and stretching their paychecks,” Duarte said.
Some Republicans argue that even if pieces of the economy are improving, it’s too late for Biden’s reelection bid to fully benefit.
“My view is that yes, things are somewhat better, but not well enough to be recognized politically,” said Rep. French Hill (R-Ark.). “I think a lot of citizens are still concerned about the fact that over the past few years, they’ve got a lot less buying power from their salaries and their dollars.”
Hill, who served as a senior member of former President George H.W. Bush’s economic team in the early ‘90s, said in his experience, Americans “lock in” their feelings about the economy over a longer period of time.
Bush went on to lose reelection, even as the economy was showing signs of improving after a downturn and a spike in unemployment.
“The economy had been growing since early 1991,” Hill recalled wryly. “But that didn’t make a lot of difference in the 1992 election.”