Yellen, criticizing Trump, says Biden’s economy has made gains

Treasury Secretary Janet L. Yellen defended the Biden administration’s economic agenda on Thursday, drawing a stark contrast to the Trump administration’s policies as President Biden begins to make a case for the general election that he has been a stronger steward of the economy than his predecessor.

Ms. Yellen’s comments came after new data released Thursday confirmed that message: The United States economy has grown at a healthy pace over the past year, exceeding 3 percent and defying expectations of a recession. The big numbers coincided with a White House push to boost the president’s economic record and send his top economic advisers around the country to confirm his strategy is working.

Biden administration officials are trying to convince a skeptical public that while they may feel pessimistic about the economy, its performance is delivering gains for average Americans. Officials are expected to spend the coming months highlighting the investments Mr. Biden has targeted in infrastructure, domestic manufacturing and clean energy projects.

In a speech at the Economic Club of Chicago, Ms. Yellen asserted that the Biden administration had successfully weathered the challenging headwinds caused by the pandemic and led a recovery that outpaced those of the rest of the world. She also suggested that the Biden administration needs more time to address affordability issues, such as improving access to child care and housing.

“Our economic agenda is far from over,” Ms. Yellen said.

The Treasury secretary also took the rare step of directly criticizing the policies of Mr. Biden’s predecessor and likely opponent, former President Donald J. Trump. Pointing to Mr. Trump’s repeated promises to rebuild America’s roads and bridges, she recalled how those promises have remained unfulfilled.

“Our country’s infrastructure has been failing for decades,” Ms. Yellen said. “In the Trump administration, the idea of ​​doing anything to fix it was the punchline.”

Ms. Yellen also blasted Trump’s tax cuts, blasting him for passing a 2017 tax law that she said enriched corporations, increased America’s budget deficit and did little to strengthen the economy.

“Previous measures like the Trump administration’s Tax Cuts and Jobs Act have increased the deficit by $2 trillion while doing little to stimulate investment,” Ms. Yellen said.

As a candidate, Mr. Trump called for extending tax breaks that are set to expire next year and for imposing additional tariffs on imports. Under Mr. Under Trump, the United States imposed tariffs on more than $300 billion of Chinese imports.

Treasury secretaries usually avoid getting into politics, but Ms. Yellen told reporters before her speech that she believed it was important to lay out the policy differences between the Trump and Biden administrations.

“I’m not going to get involved in politics,” Ms. Yellen said. “But certainly tax policy is something I’m deeply involved in and broad economic policy, and explaining to Americans what the strategy is and why it’s the right one, and why cutting taxes for the rich and hoping that the benefits will trickle down, more broadly.” , is not the right strategy.”

Ms. Yellen’s speech came as Mr. Biden traveled to Wisconsin to unveil about $5 billion in infrastructure investment in the key swing state.

It remains unclear whether the administration’s efforts will resonate with voters, many of whom continue to give Mr. Biden poor marks on the economy. Although inflation is easing, Americans are still dealing with prices that are much higher than before the pandemic. Mr. Biden took the blame for that, and in a November New York Times/Siena College poll of voters in six battleground states, 62 percent of voters who backed Mr. Biden in 2020 said they thought the economy was only “fair” or “miserable .”

Higher interest rates have made housing more expensive, and the job market is expected to tighten this year as the economy slows. Economists also expect further disruptions in energy markets, as the wars in Ukraine and Gaza continue to threaten trade routes.

Ms. Yellen acknowledged that while inflation is easing, more needs to be done to reduce costs. She said that the administration is working to lower the prices of medicines and energy products.

“Although inflation has declined, the prices of key commodities that matter to middle-class Americans remain too high, so we are taking additional measures,” Ms. Yellen said.

Although rising prices have haunted consumer sentiment for months, the latest indicators show signs of greater optimism. University of Michigan Preliminary Poll for January showed an unexpected increase in consumer sentiment that pushed the index to its highest level since July 2021, before inflation picked up.

Commerce Department data released Thursday showed the U.S. economy continued to grow at a healthy pace at the end of 2023, with inflation-adjusted gross domestic product growing at a 3.3 percent annual rate in the fourth quarter.

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