Yellen criticizes Trump and says Biden's economy has produced gains

Treasury Secretary Janet L. Yellen on Thursday defended the Biden administration's economic agenda, drawing sharp contrasts with the Trump administration's policies, as President Biden begins to make the general election argument that he has been a stronger steward of the economy than its predecessor.

Ms. Yellen's comments came after new data released Thursday reinforced this message: The United States economy grew at a healthy rate last year, surpassing 3 percent and defying expectations of a recession. The strong numbers coincided with a White House effort to shore up the president's economic performance and send his top economic advisers around the country to show his strategy is working.

Biden administration officials are trying to convince a skeptical public that while they may be pessimistic about the economy, its performance is delivering gains for average Americans. In coming months, officials are expected to emphasize the investments Mr. Biden has made toward infrastructure, domestic manufacturing and clean energy projects.

In a speech to the Economic Club of Chicago, Ms. Yellen argued that the Biden administration has successfully weathered the challenging headwinds posed by the pandemic and led a recovery that has surpassed that in the rest of the world. She 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 done,” Ms. Yellen said.

The Treasury secretary also took the rare step of directly criticizing the policies of Biden's predecessor and likely opponent, former President Donald J. Trump. She pointed to Trump's repeated promises to rebuild America's roads and bridges and 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 something about it was a punchline.”

Ms. Yellen also attacked Trump's tax cuts and blasted him for enacting a tax law in 2017 that she said enriched companies, 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 budget deficit by $2 trillion while doing little to stimulate investment,” Ms. Yellen said.

As a candidate, Mr. Trump has called for extending tax cuts that expire next year and imposing more tariffs. Under Trump, the United States has imposed tariffs on more than $300 billion of Chinese imports.

Treasury secretaries tend not to delve into politics, but Ms. Yellen told reporters ahead of her speech that she thought it was important to lay out 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, and broad economic policy, and explaining to Americans what the strategy is and why it's the right one, and why cutting taxes on the rich and hoping that trickling down its benefits, 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 crucial swing state.

It remains unclear whether the administration's efforts will get through to voters, many of whom continue to give Mr. Biden bad marks on the economy. Although inflation has slowed, Americans are still dealing with prices that are much higher than before the pandemic. 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 thought the economy would only was “fair”. ' or 'poor'.

Increased interest rates have made homes more expensive and the labor market is expected to tighten this year as the economy slows. Economists are also looking forward to more disruptions in energy markets as wars in Ukraine and Gaza continue to threaten trade routes.

Ms. Yellen acknowledged that while inflation is moderating, more needs to be done to bring down costs. She said the government has made efforts to reduce prices for medicines and energy.

“While inflation has eased, prices of key goods important to middle-class Americans remain too high, so we are taking additional action,” Ms. Yellen said.

While rising prices have been dogging consumer confidence for months, the latest indicators show signs of greater optimism. The University of Michigan's preliminary survey for January showed an unexpected increase in consumer confidence that pushed the index to its highest level since July 2021, before inflation soared.

Figures from the US Department of Commerce show that the US 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.