Treasury Secretary Janet L. Yellen defended the Biden administration’s economic agenda Thursday, contrasting sharply with the Trump administration’s policies as President Biden begins to make the general election argument that he was a better manager of the economy than his predecessor.
Ms. Yellen’s comments come after new data released Thursday reinforced that message: The U.S. economy has grown healthily over the past year, topping 3 percent and defying expectations of a recession. The high numbers coincide with White House efforts to amplify the president’s economic record and send his top economic advisers across the country to demonstrate that his strategy is working.
Biden administration officials are trying to convince a skeptical public that while they feel pessimistic about the economy, its performance is generating gains for average Americans. Officials are expected to spend the coming months highlighting the investments Mr. Biden has directed toward infrastructure, domestic manufacturing and clean energy projects.
In a speech to the Economic Club of Chicago, Ms. Yellen argued that the Biden administration had managed to overcome difficult headwinds caused by the pandemic and led a recovery that outpaced that of the rest of the world. She also suggested the Biden administration needs more time to address affordability issues, such as improving access to child care and housing.
“Our economic agenda is far from finished,” Ms. Yellen said.
The Treasury secretary also took the rare step of directly criticizing the policies of Mr. Biden’s predecessor and likely adversary, former President Donald J. Trump. Highlighting Mr. Trump’s repeated promises to rebuild America’s roads and bridges, she recalled how those promises have not been kept.
“Our country’s infrastructure has been deteriorating for decades,” Ms. Yellen said. “In the Trump administration, the idea of doing anything to fix it was a punchline.”
Ms. Yellen also criticized Mr. Trump’s tax cuts, punishing him for enacting a 2017 tax law that she said enriched corporations, increased the U.S. budget deficit and did little to strengthen the economy.
“Past measures such as the Trump administration’s Tax Cuts and Jobs Act have increased the deficit by $2 trillion, without boosting investment,” Yellen said.
As a candidate, Mr. Trump called for extending tax cuts set to expire next year and imposing more tariffs on imports. Under Mr. Trump, the United States has imposed tariffs on more than $300 billion of Chinese imports.
Treasury secretaries tended to avoid wading into politics, but Ms. Yellen told reporters before her speech that she thought it was important to expose the policy differences between the Trump and Biden administrations.
“I don’t get involved in politics,” Ms. Yellen said. “But tax policy is certainly something that I’m deeply involved in, as well as broader economic policy, and explaining to Americans what the strategy is and why it’s the right one, and why cut taxes for the rich and hoping that the benefits will trickle down widely, is not the right strategy.
Ms. Yellen’s speech comes as Mr. Biden visits Wisconsin to unveil about $5 billion in infrastructure investments in the swing state.
It remains unclear whether the administration’s efforts will reach voters, many of whom continue to give Mr. Biden low marks on the economy. Even though inflation has eased, Americans are still facing much higher prices than before the pandemic. Mr. Biden bears responsibility, and in a November New York Times/Siena College poll of voters in six battleground states, 62% of voters who supported Mr. Biden in 2020 indicated that they thought that the economy was only “fair”. » or “poor”.
High interest rates have made housing more expensive, and the job market is expected to tighten this year as the economy slows. Economists also expect further disruption in energy markets as wars in Ukraine and Gaza continue to threaten trade routes.
Ms. Yellen acknowledged that even if inflation is moderating, there is still much work to do to reduce costs. She said the administration was working to reduce drug and energy prices.
“Even though inflation has fallen, prices for essential goods that matter to middle-class Americans remain too high, which is why we are taking additional action,” Ms. Yellen said.
While rising prices have haunted consumer confidence for months, the latest indicators show signs of greater optimism. University of Michigan Preliminary Survey for January showed an unexpected emergence in consumer confidence which pushed the index to its highest level since July 2021, before the emergence of inflation.
Commerce Department figures released Thursday showed the U.S. economy continued to grow at a healthy pace through the end of 2023, with gross domestic product, adjusted for inflation, increasing at an annual rate of 3.3 % in the fourth quarter.