Biden warns of economic ‘chaos’ proposed by ‘MAGA Republicans’


President Joe Biden spoke at a northern Virginia union hall on Thursday afternoon, attempting to portray himself as an advocate for the middle class by looking back at his economic achievements and contrasting them with Republican proposals that he says him, would be catastrophic for American wallets.

“We are going in the right direction. Now we have to protect those gains … that our policies have generated, protect them from the MAGA Republicans in the House of Representatives who threaten to destroy that progress,” Biden said.

As Washington braces for a stalemate over the debt ceiling and the potential for global economic fallout later this year, the speech gave Biden a chance to distract from news of the discovery of classified documents in areas unsafe from home. and office. The unfolding story has drawn the attention of Republicans and the attention of the press. But in his speech to union workers in Springfield — a Virginia suburb just outside Washington, DC — Biden offered insight into his potential messaging strategy for re-election, focusing on what the White House really wants to talk about. .

In his remarks, Biden contrasted his administration’s work with Republican plans to cut rights programs and impose a 30% national sales tax. He also discussed progress on wage growth and unemployment, as well as key legislation, such as the CHIPS Act and the bipartisan Infrastructure Act.

“Here’s the deal: They want to cut your Social Security and Medicare…beyond that, they’re actually threatening to default us on US debt,” the president said.

“I have a rhetorical question: (Why) in the name of God would Americans abandon the progress we have made for the chaos they suggest? I don’t understand. This is why MAGA Republicans literally choose to inflict this pain on the American people. Why?” Biden asked. “I won’t let that happen. Not in my custody. I will veto anything they send.

The president said he’s ready to work with Republicans ‘on real solutions and continue to grow manufacturing jobs and build the strongest economy in the world and make sure Americans get a fair wage “. But he added that he “will not let anyone use the full faith and credit of the United States as a bargaining chip.”

Biden also announced an “Invest in America” cabinet, which will be tasked “to ensure that his economic plan generates private sector investment and continues to drive our economic progress for years to come,” according to an official. administration.

The group will include Commerce Secretary Gina Raimondo, Labor Secretary Marty Walsh, Transportation Secretary Pete Buttigieg, Treasury Secretary Janet Yellen, Health and Human Services Secretary Xavier Becerra, EPA Administrator Michael Regan, Infrastructure Coordinator Mitch Landrieu and Senior Advisor John Podesta.

Biden also celebrated newly released data showing the US economy grew more than expected in the final quarter of last year, recording solid growth through the end of 2022 even as consumers and businesses struggled against the coronavirus. inflation and historically high interest rates.

Gross domestic product – the broadest measure of economic activity – grew at an annualized rate of 2.9% from October to December last year, according to Commerce Department data released Thursday. For 2022, GDP grew by 2.1%, according to the report.

GOP legislative proposals to cut Social Security and Medicare have yet to officially materialize, but House Republicans have reportedly considered leveraging program cuts in the fight against the debt ceiling, according to the Washington Post.

Although a plan has not been formalized, the White House has already lambasted congressional Republicans this week for suggesting cuts to offset the deficit as part of negotiations to raise the national debt ceiling.

White House spokesman Andrew Bates argued in a statement earlier this week that “under the guise of ‘fiscal responsibility,’ (Republicans) want to cut the benefits that middle-class Americans pay for everything. throughout their working lives, but they also want to widen the deficit with new tax benefits for the wealthiest Americans. This is nothing more than an extreme plot to sell out middle-class families at all costs to wealthy special interests.

In the first week of the new Congress, a dozen House Republicans introduced a bill that would abolish the IRS altogether and replace the entire federal tax code with a national sales tax.

While this legislation is unlikely to become law given Democrats retain a majority in the Senate, Biden and Democrats see an opening to criticize the GOP for fringe proposals they say would hurt the U.S. economy.

The national sales tax could make things worse for low- and middle-income people and would likely reduce tax revenue. One estimate found that a tax rate of around 30% would be more likely to generate the same amount of revenue — or 44%, if measured the way state sales taxes are typically presented.

The White House and Biden were, of course, highly critical of the proposal.

The president suggested on Thursday that the proposal was an effort to give the wealthy another tax break.

“Who do you think is going to get scammed?” Biden asked. “They want to raise taxes on working people and the middle classes in America by passing a national sales tax, taxing all items from groceries, gasoline, clothing, supplies, drugs.”

The president also acknowledged reports that House Speaker Kevin McCarthy may not be in favor of the tax.

In a statement following the president’s meeting this week with Democratic congressional leaders, the White House noted that it had discussed the “continued and accelerated implementation of groundbreaking legislation such as the inflation, CHIPS and science and the Bipartisan Infrastructure Act”. The statement also stressed “the importance of building on historic economic progress,” such as low unemployment, expanding health care coverage and making gains to stabilize inflation.

In the statement, the White House said the group “agreed to continue working across the aisle … while being honest about disagreements — like our opposition to an unprecedented tax hike. for the middle class, tax cuts that make inflation worse for the rich, abortion bans, or cutting social security and health insurance.

The latest quarterly employment cost index from the Bureau of Labor Statistics showed that although employers continued to raise wages to attract workers and retain existing staff during the third quarter, their increases did not follow. inflation.

Wages and salaries for civilian workers rose 1.3% in the third quarter and 5.1% in the year ending September, according to data released last October.

The next publication of the employment cost index should be published on Tuesday.

This story has been updated with additional reports.