By Andrea Shalal
WASHINGTON (Reuters) -U.S. President Joe Biden touted his administration’s economic record and warned against a reprise of Republican “trickle-down economics” during Donald Trump’s second term in what could be his final speech on the economy at Washington’s Brookings Institution on Tuesday.
In his speech, which comes a month after bruising election defeats for the Democrats driven by voters’ concerns about inflation, Biden argued that his push to boost investments in infrastructure, manufacturing and neglected communities averted a bigger economic crisis and laid the groundwork for continued growth.
“Most economists agree the new administration is going to inherit a fairly strong economy,” Biden said. “It is my profound hope that the new administration will preserve and build on this progress.”
Biden boasted that his administration had embraced a new approach after decades of trickle-down economics that benefited wealthy Americans first, and now is growing the economy from “the middle out and the bottom up” to the advantage of the middle class.
He acknowledged that American workers were still struggling with inflation and high housing prices.
Biden highlighted the creation of 16 million jobs, the most in any single presidential term, the lowest average unemployment of any administration in 50 years, and the smallest racial wealth gap in 20 years.
He faulted Trump’s first administration for failing to develop a plan to deal with the COVID-19 pandemic, adding that Republican moves to slash taxes, offshore jobs and destroy unions had put the economy in a difficult spot and worsened the U.S. fiscal outlook.
Biden cautioned against more tax cuts for the wealthy and corporations in the second Trump term, and said Trump’s pledge to impose tariffs on overseas goods could constitute a “major mistake.” He added that he thought Trump would have trouble ending investments made under his administration, since they benefited many Republican-led states as well Democratic-led ones.
The speech echoed Biden’s message throughout his aborted 2024 election campaign, which was continued by Vice President Kamala Harris after he dropped out, although neither was able to win over voters scarred by high food and housing prices.
Despite the strength of major economic indicators and a drop in inflation from a peak of 9% more than two years ago to 2.4%, voters punished the Democrats and handed the Republicans the White House and control of both the U.S. Senate and House of Representatives.
Investment banks expect Trump’s return to the White House to fuel a dealmaking revival that could boost investment banking income to $316 billion globally next year, a jump of about 5.7% over 2024. But economists warn that the Republican’s pledge to impose high tariffs could reignite inflation while further tax cuts could swell the already high U.S. deficit.
