But privately, Biden dismissed the policy as ineffective and questioned the value of the trip, according to two people familiar with the conversations. After returning to the White House, he ferried his senior staff, including Chief of Staff Ron Klain, into the Oval Office, pestering them with questions about the purpose of the event.
Biden had worried even before the announcement that he was overstating ethanol’s ability to lower gas prices and could hurt his climate goals, the people said, speaking on condition of anonymity for discuss private conversations. But Agriculture Secretary Tom Vilsack and other officials urged Biden to leave, arguing it would at least help the Midwest — and the White House, after all, was desperate for ways to lower gas prices. .
The episode illustrates the White House’s months-long challenge to mitigate rising prices, and the president’s growing frustration with his administration’s inability to do so. The problem has exploded over the past year, consuming the president’s top aides and threatening his domestic agenda, international priorities and party political prospects.
“Inflation is the bane of our existence,” Biden said on Jimmy Kimmel’s show last week.
Klain and other senior officials have asked agency heads to seek out any steps they could take to reduce costs for Americans. Biden is increasingly venting his anger internally. And some Democrats, inside and outside the White House, want to focus on oil and gas company greed as the centerpiece of their fall message.
In a Friday speech at the Port of Los Angeles, Biden renewed an attack on big business for ostensibly keeping prices high to boost profits, saying it drove him so crazy he wanted to “blow up” someone. “Exxon made more money than God last year,” Biden said. “Exxon – start investing and start paying your taxes.” Oil companies deny that their policies are keeping prices artificially high.
But there is little evidence that any of this works. And some economists say the unusual nature of this inflationary race makes it particularly tenacious.
“I think we’re in a really tough position because we don’t have successful precedents for having such a hot economy in terms of low unemployment and high inflation and no recession,” the former secretary said. Treasure Larry Summers. “It’s going to be very, very difficult to pull off a soft landing.”
On the contrary, the problem seems to be accelerating. Prices rose 8.6% in May, the highest level in 40 years, according to the latest consumer price index released on Friday. Moreover, prices rose faster last month than they did in April, shattering White House optimism that the country had already peaked in inflation.
Five charts that explain the current inflationary race
Gasoline prices, the most visible sign of the price spike, have soared, with the national average for a gallon of gas hitting $4.99, according to AAA. Russia’s invasion of Ukraine has upended global energy markets, further disrupting supply chains already in disarray due to the pandemic. Western sanctions against Moscow as punishment for the war have also increased the costs considerably.
But Americans are feeling the price hikes across the board: the cost of food, housing, airfare, medical care and clothing have all gone up. And as prices continue to rise, economic headwinds are overshadowing and reorienting the president’s agenda on all fronts.
Sen. Joe Manchin III (DW.Va.) torpedoed the president’s sweeping economic plan in part because of concerns about inflation. The president changed his approach to Saudi Arabia, a major oil producer, after pledging as a candidate to treat the country as a “pariah”.
A new poll from the Washington Post and George Mason University’s Schar School of Policy and Government found that most Americans expect prices to continue rising next year and are changing their spending habits Consequently. Republicans continue to seize on the issue as evidence of the Democrats’ failure to manage the economy, with the congressional election less than five months away.
As administration officials increasingly conclude that there is little they can do to affect prices, they are at least trying to change their messaging – for example, touting the economy’s positive indicators, mainly an almost record level unemployment rate. But as Americans grapple with rising costs for everyday items, the argument doesn’t seem to resonate.
The White House made another push last month to show that Biden and his team were working hard to try to contain inflation. The president met with Federal Reserve Chairman Jerome Powell in the Oval Office and wrote an op-ed in the Wall Street Journal, while the White House dispatched officials to cable networks to outline the measures taken by the administration.
Biden and his aides have also begun attacking Republicans more vigorously, focusing in particular on a proposal released by Republican Sen. Rick Scott (R-Fla.) that Democrats say would make matters worse by raising taxes on many Americans.
But the message push has not resulted in any direct new measures to reduce costs.
Jason Furman, a Harvard University professor and former economic adviser to President Barack Obama, has long criticized the size of the coronavirus stimulus package passed by Democrats early in Biden’s term, arguing it was contributing to inflation. .
But he said the administration has largely done what it can to cut costs since then, though he questioned the extended moratorium on student debt repayment and the continued China tariffs. Restarting student loan repayments and removing some tariffs, Furman argued, could help alleviate the problem.
Furman also said there’s a disconnect between public anger about inflation and what Biden can do about it. “There’s nothing Americans are crazier about than gas prices,” he said. “It’s one of the things the White House has very little power over. It’s a global price, and it’s determined by global events.
The administration also struggled to explain how long Americans should expect to see prices rise, giving the inaccurate impression that rapid price increases would subside relatively quickly. When prices began to rise substantially last year, Biden and others suggested it was a result of the economy rapidly reopening after the pandemic and would fade as the economy recovers. was stabilizing.
Price increases “should be temporary,” Biden said in July 2021, a prediction echoed by top aides who promised inflation would be “transient.” In recent months, those officials have changed their minds, and late last month Biden began calling inflation his “top economic priority.”
Furman said the administration’s early analysis of the problem was followed by most estimates, including the Federal Reserve. They were just all wrong.
“They weren’t ahead of the curve. You can’t look back and say, ‘Wow, that was awesome,'” he said. “But you can’t look back and say they were doing a highly political spin operation.”
The renewed engagement with Saudi Arabia is one of the most striking political consequences of the price hike, as it marks a notable departure from Biden’s campaign rhetoric and pledges to place the rights of the man at the center of its foreign policy.
For months, senior White House and State Department officials have debated whether the president should visit the country, given his scathing criticism of Saudi Arabia for its human rights record, in particular the murder of Washington Post columnist Jamal Khashoggi.
However, following Russia’s invasion of Ukraine and months of diplomatic work by Biden officials, the president is expected to travel to Saudi Arabia later this summer and meet Mohammed bin Salman, the crown prince and de facto leader. of the Kingdom.
Officials hope the visit will help bolster oil production and facilitate peace deals in the Middle East, lowering gas prices in the process.
At the Port of Los Angeles on Friday, Biden framed inflation as a far-reaching global problem, driven by the lingering pandemic and the ongoing invasion of Russia, and he touted his administration’s efforts to improve conditions. supply chains.
“Every country in the world is getting a big chunk of that inflation – worse than we are in the vast majority of countries in the world,” he said. “But make no mistake: I understand that inflation is a real challenge for American families.”
But in a statement before the speech, Biden succinctly summed up his immediate and pressing problem: “We need to do more — and quickly — to bring prices down here in the United States.”