President Joe Biden’s visit to the critical swing state of New Hampshire to sell his domestic agenda was overshadowed by new economic warning signs of how Russia’s invasion of Ukraine is creating greater uncertainty and volatility in the world economy, compounding the obstacles the President and his party are facing in November.
This time last year, Democratic strategists had hoped Biden and his Democratic colleagues in Congress would be out on the campaign trail this spring pointing to America’s roaring comeback after the dark days of the Covid-19 pandemic.
Instead, Biden and many vulnerable Democrats are gingerly trying to maneuver around inflation that is at a 40-year high, the threat that new Covid-19 variants could derail the recovery – amid fresh confusion over masking – and the ripple effects of a war in Ukraine that some western officials now believe may stretch until the end of the year.
Comparing the impact of Russia’s invasion of Ukraine to an “earthquake,” the International Monetary Fund on Tuesday scaled back its expectations for global economic growth, predicting the world economy would expand by 3.6% in both 2022 and 2023, a sharp slowdown from growth of 6.1% in 2021. The IMF warned in its report that the war would “severely set back the global recovery, slowing growth and increasing inflation even further” at a time when the effects of the pandemic are still being felt.
The US labor market is strong, with the unemployment rate reaching a pandemic-era low last month, but it’s not clear voters will reward Biden for that. CNN’s Matt Egan reported Tuesday that gas prices are creeping up again, with some forecasters saying Americans should brace for increases heading into the heavy summer driving season. That could serve as another blow to Biden just a few weeks after he announced with great fanfare that he was trying to lower prices at the pump by releasing 1 million barrels of oil per day from the Strategic Petroleum Reserve for the next six months.
There are also rising concerns about how the war is leading to greater global food insecurity with US Treasury Secretary Janet Yellen stating in remarks Tuesday that “the war has made an already dire situation worse.” In the midst of the conflict, prices have been rising at an alarming rate on essential goods that include wheat, corn, soybeans, vegetable oils and fertilizer.
“Price and supply shocks are already materializing,” Yellen said, “adding to global inflationary pressures, creating risks to external balances, and undermining the recovery from the pandemic. I want to be clear: Russia’s actions are responsible for this. But the United States is urgently working with our partners and allies to help mitigate the effects of Russia’s reckless war on the world’s most vulnerable.”
As the administration looks for ways to demonstrate to voters that they are focused on lowering their costs, officials announced additional changes to the federal student loan system Tuesday aimed at assisting more eligible borrowers in discharging their debt sooner. Biden’s previous moves canceled student loan debt for some 700,000 borrowers by the end of March, totaling more than $17 billion in relief. But there is scant evidence so far that voters are giving him political credit for that as many of his Democratic colleagues urge him to do more ahead of what looks to be a challenging midterm environment.
Limitations of Biden’s power
The White House framed Biden’s trip to Portsmouth as a chance to show how he is using all the tools at his disposal to bring down prices for Americans while making investments in the nation’s infrastructure to move goods more quickly and efficiently.
But it was yet another foray out into the country that only underscored the limitations of what he can do quickly to improve the bottom line for families right now.
While Tuesday’s focus was on the bipartisan infrastructure law he signed last year, the most memorable part of Biden’s speech was his solemn attempt to prepare Americans for continuing economic turbulence ahead, as he argued that he was doing his best to deliver on his campaign promise to “build this economy from the bottom up and the middle out.”
“The fact is that we are in a situation where the war in Ukraine is going to continue to take its toll on the world economy. It’s going to take its toll on energy. It’s going to take its toll relative to food,” Biden said.
He noted that Russia’s invasion of Ukraine has “driven up gas prices and food prices all over the world.” Calling Russian President Vladimir Putin “a big reason for inflation,” Biden worked in the administration’s gimmicky phrase explaining the surge in gas and energy prices as “Putin’s price hike” – an attempt to blunt GOP messaging about high prices being his own fault.
Alluding to the food insecurity issues that Yellen highlighted, Biden also pointed out that Ukraine and Russia are “the two major bread baskets in the world.”
“An awful lot of people are hurting. It makes a big difference, it makes a big difference – the cost of a dozen eggs, the cost of a gallon of gasoline, it matters,” the President said, alluding to his own financial struggles earlier in his life to underscore his empathy for what Americans are going through.
While it is proving difficult for many Americans to connect their pressing pocketbook concerns to infrastructure improvements that will unfold over several years, at the Port Authority in Portsmouth Biden tried to emphasize how billions of dollars of improvements at America’s ports – through the $1.2 trillion infrastructure law – could alleviate supply chain problems that have hampered the nation’s economic recovery.
He noted that the port in Portsmouth supports more than 2,300 jobs, emphasizing how a recently completed $18.2 million Army Corps of Engineers project to widen the turning basin in Portsmouth Harbor had made it “easier, faster, and cheaper and safer for ships to get in and out.” Without a planned $1.7 million dredging project that was included in the new infrastructure law, the port might have had to turn business away, he said.
“We’re sending a message. This port is open for business and will be for a long time,” the President said.
“There’s so much more in this law,” Biden said after detailing repairs to roads and bridges, the efforts to ensure clean drinking water by upgrading aging pipes, and the expansion of access to high-speed internet. “I’m not going to bore you with the rest of it – it’s significant. Look, we’ve made a lot of progress and we have an incredible opportunity ahead of us. But we know that families are still struggling with higher prices.”
Biden lavished praise on New Hampshire Sen. Maggie Hassan, one of the most vulnerable Democratic incumbents, and Rep. Chris Pappas, who is trying to hold onto his job in New Hampshire’s 1st Congressional District, for helping to make the port upgrades happen.
In a nod to independent voters in the region, Hassan emphasized her work with Republicans in Congress to get the infrastructure measure passed, citing the investments as “the foundation for making sure that New Hampshire’s families, small businesses and our entire economy can thrive.”