Jan 21, 2024 - Politics & Policy

Scoop: Yellen takes aim at Trump's economy as key indicators surge

Photo: Kevin Dietsch/Getty Images

With consumer sentiment surging and the stock market setting record highs, Treasury Secretary Janet Yellen will travel to the Midwest this week to promote President Biden's economic record and take a rare shot at former President Trump's approach.

Why it matters: Team Biden has spent the last two years playing defense on the economy. With economic numbers and "vibes" finally improving — including a 28% jump in consumer sentiment since November — officials are now going on offense.

The big picture: The White House wants to turn November's election into a choice between Biden and Trump.

  • They're deploying Yellen to Middle America to help set the stage for the economic argument — and contrast — that Biden will make all year.
  • "In the Trump administration, the idea of doing anything to fix it was a punchline," Yellen will say, according to excerpts obtained by Axios. "But this administration has delivered."
  • "The Bipartisan Infrastructure Law is a $1.2 trillion investment in our nation's infrastructure," Yellen will say. "It is bringing new opportunities within reach for middle-class families."

Driving the news: Yellen will make her case to the Chicago Economic Club on Thursday, the same day the Commerce Department will announce U.S. GDP for 2023.

  • Yellen, who rarely mentions the Trump administration, will draw implicit — and explicit — comparisons between the economic values of Biden and Trump.
  • She will specifically call out Trump's signature tax dealparts of which expire at the end of 2025 — and argue that it benefited corporations at the expense of the middle class.
  • She will also note that 2023 didn't experience the recession that many economists predicted and that the unemployment rate has been under 4% for 23 months.

Zoom out: Biden started the year with a speech near Valley Forge, Pennsylvania, in which he mentioned Trump 44 times in 30 minutes, blaming the former president for spreading "lies" that led to the Jan. 6 Capitol riot.

  • Across the government, the White House is working to establish Trump as a foil heading into the election.
  • That task is trickier on the economy, as many Americans tell pollsters that they felt better about their economic prospects under Trump.
  • But top Biden advisers are convinced that voters' opinions on Biden's handling of the economy will start to improve as the rate of inflation slows and real incomes increase.

Zoom in: That theory was bolstered on Friday when the University of Michigan's consumer sentiment surged 9 points to its highest level since 2021.

  • Meanwhile, inflation expectations for the year ahead are 2.9% — down 0.2 of a percentage point from December, according to Axios Macro.
  • As the campaign approaches, Yellen will be spending more time on the road, barnstorming the country to promote Biden's economy — including traditional and nontraditional media appearances, like NPR's "Wait Wait ... Don't Tell Me."
  • Yellen's Chicago speech, followed by a stop in Milwaukee the next day, will be mostly forward-looking. But the trained economist sometimes can't resist tweaking the doomsayers, who claimed it was impossible to lower inflation without increasing unemployment.
  • "Economists who've said it's going to require very high unemployment to get this done are eating their words," she said in December.

The bottom line: Team Biden wants — and needs — some credit for achieving a soft landing for the economy.

  • But it also wants voters to take a hard look at Trump's overall economic values — and an approach that Biden officials say favors the wealthiest Americans.
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