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Biden says solid economic growth data proves his recovery plan is working

A MARTÍNEZ, HOST:

President Biden says a solid economic growth rate, 2.9% in the fourth quarter, proves that his recovery plan is working.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT JOE BIDEN: Look, we're moving in the right direction. Now we've got to protect those gains. We've got to protect those gains that our policies have generated. Protect them from the MAGA Republicans in the House of Representatives.

MARTÍNEZ: Radha Muthiah is president and CEO of the Capital Area Food Bank in D.C. And she says she sees another economic reality.

RADHA MUTHIAH: While some parts of the economy are on the upswing, many individuals are still recovering from the pandemic. And many of our neighbors are still struggling.

MARTÍNEZ: We're joined now by Bill Hoagland. He's a senior vice president at the Bipartisan Policy Center, which analyzes fiscal health and economic policy. Bill, the White House - how much control over the economy does the White House really have?

BILL HOAGLAND: The White House has a great deal of control over the economy. But also, the Federal Reserve does, too. And from my perspective, I think the Federal Reserve is probably the most important factor right now in terms of its interest rate increases that is bringing down the rate of inflation. But the administration can and has offered up various proposals over the last few years. Some have been adopted. But it truly is a bipartisan effort here between the Federal Reserve and the executive branch and the legislative branch.

MARTÍNEZ: How much influence does the White House have over the Federal Reserve, if any?

HOAGLAND: Supposedly nothing. And that's supposed to be an independent, of course, operation.

MARTÍNEZ: So what's your assessment, then, been of how President Biden has handled the economy so far?

HOAGLAND: Well, if I was giving him a grade, I'd give him a grade of maybe a B- or a C+. And that's still a passing grade. I think the president has done what he can do. During the pandemic, he did what was necessary in terms of providing additional assistance out there for the American public that was suffering from that. He did release from the - money that - fuel necessary to lower the rate of inflation in gasoline. He has done some things that I think are very positive in that regard. But he has also was - initiated a very large spending package that I think had some impact on inflation out there. Some economists believe that it added someplace in the neighborhood of about 2% to the - two percentage points to the inflation rate.

So the good news is that inflation is coming down. He's not completely responsible for that. The war in Ukraine, avian flu and chicken prices, as well as poultry and egg prices up - nothing that he is directly responsible for. But I think it's a combination of both the administration and the legislative branch working together. And I hope we could reduce the political squabbling as we move forward because they have a serious issue here dealing with the statutory debt limit...

MARTÍNEZ: Right.

HOAGLAND: ...That has to be raised sometime later this year.

MARTÍNEZ: How much does his spending package, for you, at least, on your report card bump him down to that B- or C+?

HOAGLAND: I would give him about half of it, I guess, is the best way I could phrase it. It's not - we haven't quantified it exactly. But I do think that the initial package, the recovery plan that came through early in his administration, was probably, most economists would argue, was more than was necessary to at that particular time and probably added to some of the inflationary aspects - as I say, two percentage points or so - in terms of the impact there. But yes, it is a response that was taken. Maybe it was overstated. But I do think it's a combination of all this. Moving forward, they'll have to really focus now on not the past, but moving forward. We do not want to have a debt limit increase - has to be done later this year. And I hope they get to it pretty soon and not wait much longer.

MARTÍNEZ: In the last 30 seconds, Bill, I mean, how much is that - or possibly, could that affect the economy, the national debt ceiling going up?

HOAGLAND: Well, I think that's a good question because I do think that the squabbling as it relates to raising the statutory debt limit, pushing it up against the brink, it could be very damaging to the economy going forward.

MARTÍNEZ: That's Bill Hoagland of the Bipartisan Policy Center. Bill, thank you.

HOAGLAND: Thank you. Transcript provided by NPR, Copyright NPR.