Eric Zuniga, Campus Carrier staff writer
President Joe Biden delivered his annual State of the Union address last Tuesday before a joint session of Congress. In his speech, Biden primarily focused on his handling of the economy, touting positive metrics such as low unemployment and job growth. Biden said that the unemployment rate is at a near-record low.
“We’re not finished yet by any stretch of the imagination, but unemployment rate is at 3.4 percent, a 50-year low. Near record—near record unemployment,” Biden said.
According to Brian Meehan, associate professor of economics, although the low unemployment rate is encouraging, there still aren’t as many people seeking jobs as before the COVID-19 pandemic.
“The unemployment rate is good news; there’s still more to that,” Meehan said. “Labor force participation rate, which is actually of the working age population how many people are actively engaged in trying to find employment, and that rate is down, I believe. It’s still not near its pre-COVID trend.”
The biggest concern for the economy now is the inflation rate, which at 6.5% is still higher than usual, despite being lower than its peak of 9% last summer. Biden said that the inflation spike is shrinking. He attributed the cause of inflation to supply chain difficulties and the war in Ukraine.
“Inflation has been a global problem because the pandemic disrupted our supply chains and Putin’s unfair and brutal war in Ukraine disrupted energy supplies as well as food supplies,” Biden said. “But here at home, inflation is coming down.”
Meehan said that inflation is still a major concern, and that addressing it will require further increases in interest rates by the Federal Reserve.
“Inflation is much higher than we’ve seen throughout the past 30 years, which was averaging about two percent a year,” Meehan said. “The major policy changes here to reduce inflation have come from monetary policy, so big increases in interest rates, and that’s got to continue.”
As part of his economic focus, Biden discussed his plans to alleviate climate change and increase investment in green technology. He said that the Inflation Reduction Act he signed last year was the most significant attempt ever to address climate change.
“Look, the Inflation Reduction Act is also the most significant investment ever in climate change, ever,” Biden said. “Lowering utility bills, creating American jobs, leading the world to a clean energy future.”
According to Meehan, while the act subsidizes certain green technologies such as electric vehicles, more negative incentives to reduce emissions are needed to effectively curb climate change.
“There are a lot of targeted subsidies in the Inflation Reduction Act, and I think that the more effective way to do that is to charge everyone for their carbon emissions,” Meehan said. “If we actually charged for the impact of pollution on the environment, when you’re creating energy, you’d see things like nuclear, solar, wind energy would become much more appealing.”
Biden also mentioned the developing conflict with House Republicans over the debt ceiling, a limit on the amount of debt the federal government can take on. Republicans have threatened to refuse to raise the debt ceiling unless Democrats accept spending cuts. Biden said that such an action by Republicans would endanger the economy.
“Some of my Republican friends want to take the economy hostage—I get it—unless I agree to their economic plans,” Biden said.
According to Eric Sands, associate professor of political science, if the debt ceiling is not raised, the federal government would not be able to pay back its loans, which would significantly damage the economy.
“If we don’t raise the debt limit, we basically can’t afford to pay on our loans, and that would cause the U.S. to effectively default, and our credit rating would be dropped significantly,” Sands said. “If our credit rating drops, that has an effect on bond prices. It has an effect on interest rates, and that in turn has dramatic effects on the economy. It’s a big deal.”
Immigration is another issue that Biden has faced recently. Last month, his administration announced new restrictions on migrants seeking asylum at the southern border. In his speech, Biden said that Congress should pass bipartisan legislation to increase funding for border security.
“Let’s also come together on immigration and make it a bipartisan issue once again,” Biden said. “If we don’t pass my comprehensive immigration reform, at least pass my plan to provide the equipment and officers to secure the border.”
According to Sands, although there is bipartisan support for increased border security funding, Biden’s immigration plan would be difficult to pass because it could grant temporary status to many undocumented immigrants.
“I know part of it is granting a lot of illegal aliens at least temporary green cards so they can remain here and continue to work,” Sands said. “I could see a lot of Republicans getting on board with hiring more agents and shoring up our presence along the border. The sticking point is going to be the twelve million illegal immigrants that are in the country right now.”
Biden also briefly addressed the concern of growing tensions with China, defending his recent decision to shoot down a Chinese balloon over American airspace. He also said that the U.S. does not seek conflict with China.
“I’ve made clear in my personal conversations, which have been many, with President Xi that we seek competition, not conflict,” Biden said.
John Hickman, professor of international affairs, said that many of Biden’s domestic policies, such as investment in infrastructure, have the effect of strengthening the United States in its economic competition with China.
“It’s all about competing with China,” Hickman said. “Rebuilding infrastructure, in a sense, everything you do to spend money to build infrastructure favors your economy over some rival.”
Although Biden will likely have trouble passing his agenda through a divided Congress, Sands said that, overall, his speech was politically effective.
“If I was grading him on the speech I’d give him a B plus,” Sands said. “He hit a lot of the big ticket items of the day and at least went so far as to explain where he stood on them.”