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Politico published an article on Thursday that highlighted internal dissent within the Biden administration over the president’s handling of inflation. According to the article, written by chief economics correspondent Ben White, progressives in the administration are frustrated that Biden has said inflation is his top priority and fear that the Federal Reserve – whose actions have been endorsed by Biden – plunges the economy into a recession.
“Roaring inflation is crushing President Joe Biden’s approval ratings and threatening to overwhelm Democrats in the midterm elections,” White wrote. “But many progressives — including some within the administration itself — say Biden’s all-out messaging war on soaring prices is making it even worse.”
White reported that progressives are concerned that the inflation-fighting effort will “stifle” the few good aspects of the economy.
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“They’re concerned that the administration’s unwavering support for the Federal Reserve’s campaign to stifle inflation will drag the economy down and undermine the few steps the White House has taken in its favor,” White reported. “Among them: a strong labor market, solid wage gains and ambitious spending proposals in areas like child care and the cost of prescription drugs that are popular with voters.”
White reported how frustration with progressives in the administration “boiled over” in May when the president said he was “laser focused” on fighting inflation alongside the Fed chairman, Jerome Powell.
“Biden has backed the central bank’s aggressive interest rate hikes, which aim to cool the economy by any means necessary, inducing a possible recession.” Concerns from progressives have highlighted growing tensions between them and more moderate administration officials.
“While every White House engages in internal political debates, this one stands out because it reflects broader tensions swirling around the party: Many progressives believe inflation is likely to subside on its own without harsh rate hikes; more moderate voices say the only path to improving the political fortunes of Democrats is to bring prices down quickly,” White wrote.
“It’s an atrocious place for the White House. Polls show inflation is a top concern for voters, so attacking it head-on seems like the smartest policy move,” he added.
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“Powell and many economists say the economy won’t work for anyone unless inflation – now at its highest level since Volcker’s days – reverses quickly,” he added.
However, Politico notes that progressives fear that the pressure to deal with inflation will conflict with the administration’s transformation”[of] the country’s infrastructure into one that relies on clean energy. They also expressed concern that inflation will hamper the government’s ability to help “women and people of color advance in the workforce.”
“Within the administration, debates heat up as the midterms approach, with Biden’s approval ratings at an all-time low and the economy showing signs of tipping into a slowdown. “, wrote White.
However, divisions within the administration vary depending on the subject matter. As for former President Trump’s tariffs on China, which Administrator Biden is considering scrapping, some administration progressives are actually advocating keeping them despite objections from Treasury Secretary Janet Yellen.
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“Progressives are troubled by Yellen’s strong support for Powell’s rate hike campaign as well as his support for lifting some Chinese tariffs,” White reported. “On China tariffs, White House progressives say lifting the sanctions would have minimal impact on prices and could hurt American workers. Major labor groups are also overwhelmingly opposed to lifting the tariffs.”
Waiving tariffs is “a policy that would get you very little and drive a lot of people very crazy,” a senior administration official told Politico.