President Biden used his State of the Union address to refocus the nation on how far the economy has come since the pandemic recession. But he also highlighted his plans to help slow rapid price gains, underscoring the challenge Democrats face ahead of the midterm elections: Inflation is painfully high, voters are unhappy about it, and the most tried and true way to cool price increases involves hurting growth and the labor market, the New York Times reported. Biden struck a defiant tone in the face of that glum outlook, insisting that his administration can take steps — including encouraging corporate competition and strengthening a supply chain that has struggled to keep up with consumer demand — to slow price increases without dragging down employment and pay. The challenge is that White House policies have historically served as a backup line of defense when it comes to containing inflation, which is primarily the Federal Reserve’s job. The central bank is prepared to move swiftly in the coming months to raise interest rates, making money more expensive to borrow and spend. Higher rates are meant to slow hiring, wage growth and demand enough to tamp down price increases. It is possible that inflation could ease up so much on its own this year that the Fed will be able to gently slow the economy toward a sustainable path. But if price gains remain rapid, the Fed’s playbook for combating overheating is by inflicting economic pain. That makes inflation — which is running at the fastest pace in 40 years — a major liability for the Biden administration, one that the president addressed repeatedly Tuesday night and called his “top priority.” It is undermining consumer confidence by chipping away at paychecks and causing sticker shock for consumers trying to buy groceries, couches or used cars. Biden said his administration would begin a “crackdown” on ocean shipping costs, which have soared during the pandemic. He suggested that the administration wanted to cut the cost of prescription drugs, an ongoing push of his.
