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On Thursday night, President Joe Biden will deliver his election-year State of the Union address. A spate of new opinion polls released over the weekend highlighted the serious challenges facing him as he seeks reëlection: concerns about his age, the southern border, the Israel-Hamas war, and the economy. The RealClearPolitics poll average currently shows him trailing Donald Trump by two points in a head-to-head contest, and by 2.8 points when third-party candidates are included. It’s particularly alarming for the President that, with many voters still focussed on the rising cost of living, he hasn’t received much credit for an economic record that, in many ways, is impressive. According to the poll average, just 40.2 per cent of Americans approve of his handling of the economy, and 57.4 per cent disapprove. To improve his electoral prospects, Biden badly needs to turn those figures around. The State of the Union presents a much needed opportunity for him to talk to the American people about his economic record. Here, with apologies for my lame efforts to capture his folksy syntax, is a suggestion for how he might go about it:
Good evening, my fellow-Americans. Since I last spoke to you from this hallowed chamber of democracy, thirteen months ago, the U.S. economy has continued its strong recovery from the coronavirus pandemic. This time last year, many economists were predicting a recession following the Federal Reserve’s decision to raise interest rates in order to bring down inflation. But, far from slumping, the economy expanded at a faster rate in 2023 than it did in the previous year: 2.5 per cent, compared with 1.9 per cent. In the first three years of my Presidency, inflation-adjusted G.D.P. growth has averaged 3.4 per cent. I don’t want to belabor the point, but that compares with an average annual growth of less than one per cent under the other guy.
And here is another comparison, one you may have heard me make before: in economic terms, the United States is outpacing the rest of the developed world. Don’t take my word for it. Ask the Organisation for Economic Co-operation and Development, which is a bunch of economic wonks from various countries who get to work in a nice, leafy part of Paris. According to the O.E.C.D.’s latest global economic report, which was released a few weeks ago, the U.S. economy easily outgrew the rest of the G7 bloc in 2023, with only Japan getting anywhere close. For 2024, the O.E.C.D. is predicting a repeat performance, with the U.S. expanding three and a half times as fast as the Euro area and twice as fast as Japan. If there were an Olympic gold medal for rebounding from the pandemic, Team U.S.A. would be receiving it.
Getting back to the home front, during the past twelve months job growth has also remained reassuringly robust. Between January, 2023, and January, 2024, employers increased their payrolls by more than 2.9 million. Thanks to a strong demand for workers, the unemployment rate stands at just 3.7 per cent. In fact, it’s been below four per cent for roughly two years now, which is something that hasn’t happened since the Beatles were still together and I was graduating from law school and going to work as a public defender in Wilmington.
Jobs, jobs, jobs. Over the years, you’ve probably heard me say how my father used to always tell me that a job is about more than a paycheck—it’s about your dignity, your respect. Well, thanks to the strength of the labor market, more and more Americans from historically disadvantaged groups have been able to find some of that dignity and respect—and a regular paycheck. Since September, 2022, the unemployment rate for Black Americans has been at or below six per cent. It hasn’t been this low for such an extended period since the Labor Department started keeping records, more than fifty years ago. The unemployment rate among Hispanics is only five per cent. Among Americans with disabilities, it’s 6.6 per cent, down from twelve per cent when I took office, in January, 2021.
Now, I’m not claiming that I, or any of my Democratic colleagues, deserve all the credit for these developments. A lot of the kudos should go to the enterprising Americans who created nearly 5.5 million new businesses last year—that’s another record—and to the countless hardworking Americans who have joined, or rejoined, the workforce since the pandemic relented. I’ve always said: nobody can match the American worker for enterprise and hard work. Nobody.
But healthy economic growth involves a partnership between the private sector and the public sector. And my Administration, together with Congress, has taken a number of unprecedented steps to boost the economy and make it stronger for the longer term, including passing the American Rescue Plan Act, the Inflation Reduction Act, the bipartisan infrastructure law, and the CHIPS Act. How have these pieces of legislation worked out? Well, one way to gauge the results is to look at the manufacturing sector. Last year, American manufacturers raised their spending on new plants and other facilities by more than sixty per cent. According to the Commerce Department statisticians, that was the biggest increase since Harry Truman was giving ’em hell from the Oval Office.
Of course, we need to balance these positive developments with the fact that too many Americans are still struggling to pay their bills, put food on their tables, and get ahead in life. We all know that over the past few years the cost of many essential household items—from food to car insurance and rent—has gone up and stayed up. High inflation has been a worldwide phenomenon, but that’s no consolation to American families who are having to change their buying habits, cancel their vacations, or postpone their plans of finding a new home.
Thankfully, over the past year and a half, the inflation rate has come down sharply: it’s now running at 3.1 per cent. The prices of some items that skyrocketed during 2021-22, including eggs, fuel oil, gasoline, and used cars, have fallen back somewhat, although they are still too high. Plus, thanks to the Inflation Reduction Act, hundreds of thousands of seniors are now paying a lot less for insulin than they used to. Under the old system, the average out-of-pocket cost for people on Medicare was about sixty-three dollars a month; today, it is capped at thirty-five dollars. For seniors on fixed incomes, that’s an important piece of cost relief, and the savings aren’t confined to Medicare. In last year’s State of the Union, I called for an extension of the thirty-five-dollars-a-month cap to all Americans, regardless of their age or insurance status. I’m glad to report that, at the start of this year, a number of major drug companies did adopt this policy, cutting their prices, in some cases, by more than seventy per cent. That’s good news!
But we’ve still got a lot of work to do. Prices remain too high for a lot of everyday goods. And I want to assure the American public that, if I am reëlected, my Administration will continue to do all it can to help relieve the cost burdens on hardworking Americans. In some cases, we’ll rely on existing legislation. For example, starting in 2025, all Medicare recipients will see their total prescription-drug costs capped at two thousand dollars per year. We’ll use other tactics, too, such as pressing corporations that have been padding their profits to pass along savings to their customers and using antitrust laws to boost competition. Just last week, the Federal Trade Commission sued to block a merger between two big supermarket chains on the grounds that it would lead to higher prices for consumers. That’s unacceptable. Also, we’ll look for new ways to tackle some of the big long-term challenges that the country needs to address, such as making college more affordable for low- and middle-income students; reducing the racial wealth gap; and helping first-time buyers to purchase a home.
So there’s a lot to be done, and I understand why so many people tell opinion pollsters that the economic recovery hasn’t filtered down to them. But, to conclude, I’d like to mention a bit of good news on that front. In December, a Wall Street Journal poll found that just thirty-four per cent of Americans believed their personal financial situation had moved in the right direction in the previous year. In a new Journal poll that was released on Sunday, this figure had moved up to forty-three per cent, a jump of nine points in two months. Of course, I’d like to see the number rise to well above fifty per cent, but the trend is moving in the right direction. My fellow-Americans, all the hard work of the past few years is starting to pay off. Let’s finish the job. ♦
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