President Joe Biden is trying to showcase his economic competency one week after the largest bank collapse since 2008. However, the public’s skepticism about the Democrats’ management of the economy may pose a challenge for Biden’s impending reelection campaign.
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According to GOP strategists like Republican National Committee spokesman Gates McGavick, Biden “incited” inflation through his partisan spending packages, which “compelled” the Federal Reserve Bank to increase interest rates and have a negative impact on financial institutions, like Silicon Valley Bank, Signature Bank and now First Republic Bank.
“Now Biden wants to make the same mistakes with his disastrous $6.9 trillion spending spree,” McGavick told the Washington Examiner regarding the President’s 2024’s fiscal budget. “Biden wants to make everything worse while Americans are living with the consequences of his failed economy.”
While Democrats are confident that they can convince the public that the economy is going well, inflation is still a problem, and the party is running out of time to win the argument before the hard debt ceiling deadline and potential default this summer. Furthermore, the Supreme Court is expected to issue an opinion in June on immigration-related federal authority Title 42, whose rescission could lead to an increase in border crossings, for which Biden seems ill-prepared.
“His budget reflects [his] priorities and how he’s focusing on holding tax cheats accountable, extending the solvency of Medicare, protecting Social Security, investing in manufacturing jobs in the United States,” said a senior Democratic official. “That is a budget that reflects the values of Democrats and President Biden.”
Biden’s “swift action” concerning SVB “saved a lot of jobs and small businesses,” said Democratic strategist Mike Nellis. “The economy created 300,000 jobs last month, while inflation is slowing. Overall, President Biden is doing his job, and he’s doing it quite well.”
While Biden has been criticized for his delayed responses to several events, such as the Chinese spy balloon and the toxic train derailment in East Palestine, Ohio, his administration was relatively quick to react to a run on SVB by depositors last week.
Despite Biden’s moves, Yellen had to broker a $30 billion deal with 11 other banks to demonstrate private sector support for troubled First Republic Bank. Biden is also differentiating his response to the financial crisis of 2008 from that of former President Barack Obama, repeating that he did not approve a taxpayer-funded bailout.
“When banks fail due to mismanagement and excessive risk-taking, it should be easier for regulators to clawback compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again,” he wrote. “Congress must act to impose tougher penalties for senior bank executives whose mismanagement contributed to their institutions failing.”
Despite the efforts to alleviate the situation, Biden still underperforms polls when it comes to his economic management. According to a Quinnipiac University survey released this week, Biden’s job approval ratings remained negative among registered voters (39%-55%) and even worse when all respondents were quizzed on the economy (36%-59%).
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