He’s already presided over historic inflation — now President Biden is warning of a recession next year.
Biden brushed off the surprise economic slowdown in the first quarter of 2022 in response to a reporter’s question after he proposed a new $33 billion aid package for Ukraine.
“No one is predicting a recession now. They’re predicting, some are predicting there may be recession in 2023. I’m concerned about it,” Biden said, before pushing his stalled plans to raise taxes on wealthy people and large businesses.
“I know one thing, if our Republican friends are really interested in doing something about dealing with economic growth, they should help us continue to lower the deficit, which we’ve done last year with $350 billion. They should be willing to work with us to have a tax code that is actually one that works and everybody pays their fair share,’ Biden said.
The federal deficit is declining after two years of massive spending bills during the COVID-19 pandemic — though the national debt continues to grow. Last year, the deficit declined despite Congress approving Biden’s $1.9 trillion stimulus bill without fiscal offsets and a $1.2 trillion bipartisan infrastructure bill that included an estimated $256 billion in unfunded spending.
The national GDP shrank in the first quarter of 2022 after 5.7 percent growth in 2021, which was the highest rate of annual growth since 1984. The slowdown this year coincides with soaring inflation, which hit a four-decade high of 8.5 percent in March.
A common definition of a recession is two consecutive quarters of economic decline, though associated factors such as the unemployment rate and industrial production are also indicators, according to the US Bureau of Economic Analysis.
“Here’s the deal: we also had last quarter consumer spending and business investment and residential investment increase at significant rates, both leisure as well as hard products, number one,” Biden said. “Number two, unemployment is at the lowest rates since 1970. A record 4.5 million businesses were created last year.”
Biden proceeded to confirm that he’s considering a large financial reprieve for people with student loans and Senate Majority Leader Chuck Schumer (D-NY) said advocates of the policy were “making progress” on winning over Biden on $50,000 in loan forgiveness.
“I am considering dealing with some debt reduction. I am not considering $50,000 debt reduction. But I’m in the process of taking a hard look at whether or not there will be additional debt forgiveness and I will have an answer on that in the next couple of weeks,” Biden said.
Biden campaigned on forgiving $10,000 in student debt, but after taking office, his administration has called on Congress to pass legislation that would authorize the move.