Biden acknowledges inflation ‘sapping the strength of a lot of families’ as economists prepare for Fed to raise interest rates

By Kate Sullivan and Arlette Saenz, CNN

A fired-up President Joe Biden spoke to a friendly crowd of union supporters Tuesday, hoping to put a positive spin on his economic record amid inflation not seen in decades and blame Republicans for blocking his domestic agenda.

Speaking to the AFL-CIO convention in Philadelphia, Biden sought to reassure the American people that tackling the worst inflation the nation has seen in decades remains a top priority for him and his administration. The speech came a day before the Federal Reserve could raise interest rates as much as three-quarters of a percentage point as it attempts to get inflation under control. The issue has been bedeviling Biden and his White House for months after they downplayed inflation concerns last year.

The President acknowledged inflation is “sapping the strength of a lot of families,” as the price of gas and food skyrockets — an issue being made worse by Russia’s invasion of Ukraine. But even as he sought to emphasize his administration is fully focused on the problem, the President conceded he is left without many options to fight the price hikes, particularly in a narrowly divided Senate that has blocked the bulk of Biden’s domestic agenda.

“The problem is Republicans in Congress are doing everything they can to stop my plans to bring down costs on ordinary families. That’s why my plan is not finished and why the results aren’t finished either,” Biden said.

The President continued, “Jobs are back but prices are still too high. Covid is down but gas prices are up. Our work isn’t done. But here’s the deal: America still has a choice to make. A choice between a government by the few — for the few — or a government for all of us. Democracy for all of us. An economy where all of us have a fair shot and a chance to earn our place in the economy.”

The President on Tuesday focused on drawing a contrast between his economic policies and the plan put forward by the leader of the Senate Republicans’ campaign arm, Sen. Rick Scott of Florida. Under Scott’s plan, which has been rebuked by Senate GOP leader Mitch McConnell, all federal legislation would have a sunset provision five years after it passes.

“Really ask yourself, how are they going to sleep at night knowing that every five years, Ted Cruz and the other ultra-MAGA Republicans are going to vote on whether you’ll have Social Security, Medicare, Medicaid?” Biden said.

He said, “That’s what this is about. They’ve always wanted to cut Social Security. They’ve always wanted to cut Medicare. They’ve always wanted to cut Medicaid.”

The President in recent months has been leaning into criticizing what he describes as an “ultra-MAGA agenda” on the right as part of his messaging heading into November’s midterm elections.

During the speech, Biden touted his administration’s efforts to aid the nation’s recovery from the coronavirus pandemic, including the Covid-19 relief bill and the bipartisan infrastructure law.

“While it was going on, America created more … billionaires during that crisis in 2020 than any year in history. Talk about a contrast. Ordinary people getting, waiting in line for an hour for a box of food, and the policies of the past created more billionaires than ever in American history. Folks, it’s hard to believe, but it’s true. That’s what we inherited,” Biden said.

He also mentioned some actions he’s taken, and others he’s considering, to fight inflation but Biden has previously said that there is not much more he’s able to do that will have a noticeable effect.

The White House has been trying for months to demonstrate its commitment to dampening inflation and bringing down soaring prices that are placing stress on millions of American families. But the President acknowledged earlier this month there is little he can do to lower the cost of gasoline or food in the immediate term.

The President and his administration have repeatedly pinned the blame for rising gas and energy prices on Russian President Vladimir Putin and his unprovoked invasion of Ukraine, though other factors, including high demand, clogged supply chains, rising housing costs and Covid-19 stimulus efforts have also been cited by experts as reasons behind the surge.

Measures that Biden has taken to try and combat price hikes — such as record-breaking releases of crude oil from the US’ strategic reserve — have not worked; for the first time ever, a gallon of regular gas now costs $5 on average nationwide, according to AAA’s Saturday reading.

Combined with a dropping stock market and intense warnings from high-powered CEOs, the economy has become the White House’s top political problem and priority. But the President’s spokesperson argues that Americans will be able to weather the economic storm thanks to their actions since Biden took office.

“We know that families are concerned about inflation and the stock market. That’s something that we are aware of. We know that what we’re seeing right now is what we’re facing are global challenges,” White House press secretary Karine Jean-Pierre told reporters Tuesday.

She added, “The American people are well positioned to face these challenges because of what we’ve done the past year and a half on dealing with the economy… but yes, we are watching this closely.”

US stocks have plunged into a bear market, which happens when stocks close down 20% or more from their most recent high. A closely watched inflation report showed prices rising 8.6% in May, which is the fastest rate since 1981.

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CNN’s Betsy Klein and Allison Morrow contributed to this report.