The president began the address by talking about Russia’s invasion of Ukraine, winning cheers and multiple standing ovations from Democrats and Republicans alike for his message on uniting against Russia. “When dictators do not pay a price for their aggression, they cause more chaos,” he said. “We countered Russia’s lies with the truth. And now—now that he’s acted, the free world is holding him accountable.” The U.S. and its allies so far have imposed a series of economic sanctions on Russia, including cutting off some of its banks from the international money transfer system, SWIFT, and freezing Russian banks’ U.S. assets, including the central bank’s, to prevent Russia from using its foreign reserves to protect the value of the ruble. The president said the U.S. would be putting an additional squeeze on Russia’s economy by closing off American air space to all Russian flights, noting that Russia’s stock market had already lost 40% of its value and that trading remained suspended. “Putin is now isolated from the world more than he has ever been,” Biden said. The president promised that the economic sanctions on Russia were meant to weaken their economy, not ours. Even so, the U.S. stock market has felt the pressure of the conflict, falling into correction territory last week, and the price of Brent, a benchmark crude oil, is surging—and could reach $140 per barrel, some analysts suggest. In a worst-case scenario, if oil jumps to $140 per barrel and European natural gas prices also rise, it could increase inflation by 2 percentage points. Biden said the U.S. will be releasing 30 million barrels of oil from its strategic petroleum reserve in an effort to “help blunt gas prices here at home.” However, that amount might not make much difference for U.S. oil and gas prices since, in 2020, the U.S. used about 18 million barrels of oil each day. Higher oil prices mean higher prices for gasoline, which according to AAA were at $3.72 per gallon of regular gas on Thursday. The conflict between Russia and Ukraine could also affect how fast and how much the Federal Reserve will increase its benchmark interest rate. Aggressive rate hikes and tougher sanctions on Russia (such as cutting off oil and gas) could slow the U.S. economy, while slower or fewer interest rate hikes could allow inflation to rise even higher.
Inflation Is a ‘Top Priority’
With the annual inflation rate at a near 40-year high of 7.5%—a level that could trigger rate hikes—many Americans have rising prices on their minds. Indeed, a recent survey showed that consumers are increasingly substituting groceries for dining out, in order to stretch their monthly food budgets. Biden addressed concerns about price increases, saying that higher inflation is robbing people of the gains they might otherwise feel. “That’s why my top priority is getting prices under control,” he said. His plan to fight inflation includes reducing costs by making more products in America, which he said will help lower the federal deficit. “Make more cars and semiconductors in America, more infrastructure and innovation in America, more goods moving faster and cheaper in America, more jobs where you can earn a good living in America,” Biden said. “Instead of relying on foreign supply chains, let’s make it in America.” Biden said his proposals—supported by top business leaders and 17 Nobel laureates in economics—include reducing the cost of prescription drugs. For instance, he proposed capping the cost of insulin at $35 a month to make it more affordable. The president also said he wants to cut the cost of child care, saying middle-class and working families shouldn’t spend more than 7% of their incomes on child care. Parents have gone into debt, taken up a second job, and even given up a pet to cope with the burden of high child care costs. “My plan would cut the cost of child care in half for most families and help parents, including millions of women who left the workforce during the pandemic because they couldn’t afford child care, to be able to get back to work,” Biden said. Biden also described his proposal to tax the rich, proposing a 15% minimum tax rate for corporations and stressing that anyone earning less than $400,000 annually will not pay any additional taxes. “Just last year, 55 of the Fortune 500 companies earned $40 billion in profit and paid zero in federal income taxes,” he said. “It’s not fair.”
Optimism About COVID-19 Recovery
The president remained largely optimistic about the country’s recovery from COVID-19, saying that Americans are “moving forward safely, back to a norm—more normal routines.” Under recently updated guidelines from the Centers for Disease Control and Prevention, most people in most of the country can now be mask-free, he said, adding that, based on projections, even more of the country will reach that point in the coming weeks. While highlighting the importance of vaccines, the president also warned about the possibility of new variants that could again trigger surges in COVID-19 cases, hurting the economy and job growth. “I can’t promise a new variant won’t come,” Biden said. “But I can promise you we’ll do everything within our power to be ready if it does.” The president ended his speech by suggesting four proposals he thinks would have bipartisan support. Calling it a “Unity Agenda,” he proposed plans to fight opioid addiction, increase accessibility to mental health services, provide comprehensive healthcare for veterans, and invest in cancer research to make it a more treatable disease along with Alzheimer’s and diabetes. Have a question, comment, or story to share? You can reach Hiranmayi at hsriniva@meredith.com.
