It’s the economy, stupid.
The old quip was never truer than during the CNN Presidential Debate where pocketbook issues took center stage.
At the top of the high-stakes faceoff, President Joe Biden and former President Donald Trump sparred over their economic records in a bid to persuade undecided voters theirs is the winning plan to slow rising prices.
Exasperated Americans are paying more for the basics from check-out lanes to the gas pump, souring the national mood and making the inflation surge one of Biden’s greatest challenges going into the November rematch with Trump.
How is Biden doing with the economy?
While the economy has performed well while Biden has been in office, the president has had trouble convincing inflation-weary consumers that his “Bidenomics” plan is working for them. Surveys show consumers are more focused on how much prices have gone up in the last three years than how much slower prices are increasing now.
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On Thursday, Biden painted himself as a champion for middle-class and working-class voters, recalling the kitchen-table economics growing up in the northeastern Pennsylvania city of Scranton.
He has touted his administration’s efforts to crack down on “greedflation” (corporations raking in profits from higher prices) and “shrinkflation” (the practice of selling smaller-sized items for the same price), rein in prescription drug prices as well as bank overdraft and credit card fees and eliminate hidden “junk fees” – surcharges often buried in the fine print that quietly shortchange consumers when they book hotel rooms, buy concert tickets or pay their cable bill.
Prices rose significantly during Biden’s first year in office. Biden said Trump handed him an economy in freefall when he took office though the economy was already recovering from the COVID-19 pandemic in early 2021. Policies under both leaders likely contributed to inflation, according to economists.
“By the time he left, things were in chaos. Literally chaos,” Biden said, adding his administration has tried to put things back together but “there’s more to be done.”
He also touched on housing prices. “We’re going to make sure we reduce the price of housing. We’re going to build 2 million new units,” Biden said. “We’re going to cap rents so corporate greed can’t take over.”
Despite low unemployment and a record-high stock market, Biden hasn’t gotten much credit for the improving economy, though that may be changing.
A new poll released last week by Fox News found Biden leading Trump 50%-48% as Americans’ outlook on the economy improves. The poll found that more Americans still trust Trump over Biden on the economy, but by a narrower margin than a month ago.
What are Trump’s plans for the economy?
Blaming Biden for stubborn inflation and runaway interest rates, Trump has made the economy a major plank of his reelection campaign, pledging to “end the Biden inflation nightmare” and calling the combination of government spending and inflation “a nation buster.”
On Thursday, he played up the good times Americans enjoyed when he took office in 2017 – a period of relative economic stability that he inherited from the Obama administration and that boasted a lower cost of living that Americans now long for.
“Everything was rocking good” until Biden’s handling of the COVID crisis sparked inflation, Trump said. “I gave him a country with essentially no inflation, it was perfect, it was so good. All he had to do was leave it alone,” he said.
He credited his tax cuts for large corporations and high-income earners. “The tax cuts spurred the greatest economy that we’ve ever seen just prior to COVID, and even after COVID it was so strong that we were able to get through COVID much better than just about any other country.” Now, Trump said, “inflation is killing our country,” he said.
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Economy, inflation top voters’ concerns
Moody’s Analytics predicts an inflation spike should Trump win the election. According to its study, Trump’s plan for the economy would trigger a recession by mid-2025, with inflation rising to 3.3% compared to the 2.4% forecast for Biden.
Despite these findings, polls show Americans tend to trust Republicans more when it comes to handling the economy and inflation. Forty-six percent trust Trump on the economy versus 32% for Biden, according to a late April survey of more than 2,000 adults from ABC News and Ipsos.
Voters generally rank the economy and inflation as their two top concerns. When it comes to who and what’s to blame for high prices, 41% of Americans say government spending and policies while 39% blame corporate greed and 20% supply chain disruptions, according to a new Axios Vibes survey from The Harris Poll.
Republicans are twice as likely as Democrats to blame the government while Democrats are twice as likely as Republicans to blame corporate greed, the survey found.
How Trump’s and Biden’s economic plans compare
TARIFFS: Both candidates have called for increased tariffs on Chinese imports, but Trump proposed significantly higher levies. Economists have warned that his strategy could hike inflation and hurt the economy. Biden said he would continue targeted tariffs against certain industries, much like he did earlier this year when he slapped tariffs on Chinese electric vehicle and chip imports. Tariffs come at a price and that price is often passed on – at least in part – to consumers. Trump denied that his proposals would drive up costs for Americans, but economic studies found that consumers – not Chinese companies – foot the bill for tariffs during his administration. Biden slammed Trump’s 10% global tariff plan, which he said will cost American families $2,500 a year. “China’s going to own us if you keep allowing them to do what they’re doing,” Trump told Biden.
TAXES: Biden slammed the 2017 tax cuts that Trump pushed through Congress as president that reduced the tax rate for corporations and the wealthy. The cuts expire at the end of 2025. Biden has proposed higher taxes for corporations and the wealthy and said he would extend tax cuts for those earning less than $400,000 a year. Trump said he would extend his 2017 tax cuts that gave big breaks to the wealthy and that he would lower the corporate rate to 20%. “The tax cut spurred the greatest economy we have ever seen,” Trump said.
INTEREST RATES: In his first term, Trump had no qualms breaking tradition and pressuring the Federal Reserve to slash interest rates to zero – a move typically reserved for economic emergencies. The Wall Street Journal earlier this year reported some of his advisors are drafting a range of proposals that would erode the Fed’s independence should Trump win a second term, going so far as to suggest Trump should play a role in setting interest rates. Meanwhile, the Biden administration has emphasized the central bank’s independence as “a critical component of its ability to control inflation.” He has suggested strengthening the Fed’s focus on racial economic equity.
SOCIAL SECURITY: Biden said he would raise the payroll tax cap to prevent benefit cuts to the Social Security trust fund. He also said Trump “wants to get rid of” Social Security. Trump shook his head and called Biden a liar. Trump has said he would not cut Social Security benefits but has not specified how he would prevent the fund from being depleted.
CHILD CARE: When asked about the growing child care costs and how they would make it more affordable, Trump instead used his time to attack Biden on his leadership and border policies. Biden talked up the country’s military and dismissed Trump as a poor president before saying he wants to increase the child care tax credit, make it easier for single parents to go back to work and encourage businesses to have child care facilities.
Joey Garrison and David Jackson contributed to this report.
