Treasury Secretary Janet L. Yellen defended the Biden administration’s economic agenda on Thursday, drawing sharp contrasts with the Trump administration’s policies as President Biden begins to make the general election case that he has been a stronger steward of the economy than his predecessor.
Ms. Yellen’s comments came after new data released Thursday reinforced that message: The United States economy grew at a healthy pace last year, topping 3 percent and defying expectations of a recession. The strong numbers coincided with a White House effort to bolster the president’s economic record and send his top economic advisers around the country to argue that his strategy is working.
Biden administration officials are trying to convince a skeptical public that while they may feel pessimistic about the economy, its performance is paying off for average Americans. Officials are expected to spend the coming months emphasizing investments Mr. Biden has directed in infrastructure, domestic manufacturing and clean energy projects.
In a speech at the Economic Club of Chicago, Ms. Yellen argued that the Biden administration had successfully weathered the headwinds caused by the pandemic and led to a recovery that outpaced those in the rest of the world. He also suggested the Biden administration needed more time to address affordability issues such as improving access to child care and housing.
“Our economic agenda is far from complete,” Ms. Yellen said.
The Treasury secretary also took the rare step of directly criticizing the policies of Mr. Biden’s predecessor and potential rival, former President Donald J. Trump. Pointing to Mr. Trump’s repeated pledges to rebuild America’s roads and bridges, he recalled how those promises have not been fulfilled.
“Our nation’s infrastructure has been deteriorating for decades,” Ms. Yellen said. “In the Trump administration, the idea of doing anything to fix it was deadlocked.”
Ms. Yellen also attacked Mr. Trump’s tax cuts, blaming him for enacting a tax law in 2017 that she said enriched corporations, increased America’s budget deficit and did little to make the economy stronger.
“Previous measures like the Trump administration’s Tax Cuts and Jobs Act increased the deficit by $2 trillion while doing little to stimulate investment,” Ms. Yellen said.
As a candidate, Mr. Trump called for extending tax cuts scheduled 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 tend to avoid getting into politics, but Ms. Yellen told reporters before her speech that she thought it was important to air the policy differences between the Trump and Biden administrations.
“I don’t get involved in politics,” Ms. Yellen said. “But certainly tax policy is something I’m deeply involved with and broad economic policy, and explaining to the American people what the strategy is and why it’s the right one, and why cutting taxes on the rich and hoping that the benefits will decrease, in general. , is not the right strategy.”
Ms. Yellen’s speech came as Mr. Biden traveled to Wisconsin to unveil about $5 billion in infrastructure investments in a critical state.
It remains unclear whether the administration’s efforts will resonate with voters, many of whom continue to give Mr. Biden poor marks on the economy. Although inflation has subsided, Americans still face prices that are much higher than before the pandemic. Mr. Biden is to blame for that, and in a November New York Times/Siena College poll of voters in six battleground states, 62 percent of voters who supported Mr. Biden in 2020 said they believed the economy was just “fair” or “poor”.
Rising interest rates have made housing more expensive, and the labor market is expected to tighten this year as the economy slows. Economists are also watching for more turmoil in energy markets as the wars in Ukraine and Gaza continue to threaten trade routes.
Ms. Yellen acknowledged that while inflation is moderating, more needs to be done to reduce costs. He said the administration is working to reduce prices for medicine and energy.
“Although inflation has declined, the prices of essential goods that matter to middle-class Americans remain very high, so we are taking additional measures,” Ms Yellen said.
While rising prices have haunted consumer sentiment for months, the latest indicators have shown signs of greater optimism. The University of Michigan’s preliminary survey for January showed an unexpected uptick in consumer sentiment that pushed the index to its highest level since July 2021, before inflation soared.
Commerce Department data released Thursday showed the U.S. economy continued to grow at a healthy pace at the end of 2023, with inflation-adjusted gross domestic product growing at an annual rate of 3.3 percent in the fourth quarter.
