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Signs point to more economic turmoil as war in Ukraine escalates

By this time last year, Democratic strategists had hoped Biden and his fellow Democrats in Congress would be campaigning this spring, signaling America’s comeback from the dark days of the Covid-19 pandemic.

Instead, Biden and many vulnerable Democrats are cautiously trying to sidestep inflation at its highest level in 40 years, the threat that new variants of Covid-19 could derail the recovery – amid further confusion over masking – and the ripple effects of a war in Ukraine that some Western officials say could stretch into the end of the year.
Comparing the impact of Russia’s invasion of Ukraine to an “earthquake”, the International Monetary Fund on Tuesday lowered its forecast for global economic growth, predicting that the world economy would expand by 3, 6% in 2022 and 2023, a sharp slowdown in growth from 6.1% in 2021. The IMF warned in its report that the war would “seriously set back global recovery, slow growth and further increase inflation” to a when the effects of the pandemic are still being felt.
The U.S. labor market is strong, with the jobless rate hitting a pandemic-era low last month, but it’s unclear voters will reward Biden for it. CNN’s Matt Egan reported on Tuesday that gasoline prices are rising again, with some forecasters saying Americans should brace for increases ahead of the heavy summer driving season. It could deal another blow to Biden just weeks after announcing to great fanfare that he was trying to lower pump prices by releasing 1 million barrels of oil a day from the Strategic Petroleum Reserve for the next six months. month.
There is also growing concern about how war is leading to greater global food insecurity, with US Treasury Secretary Janet Yellen saying on Tuesday that “war has made an already dire situation worse.” Amid the conflict, prices have risen at an alarming rate on essential commodities such as wheat, corn, soybeans, vegetable oils and fertilizers.

“Price and supply shocks are already materializing,” Yellen said, “adding to global inflationary pressures, creating risks for external balances and undermining the post-pandemic recovery. I want to be clear: Russia’s actions are responsible for this. States are working urgently with our partners and allies to help mitigate the effects of Russia’s reckless war on the world’s most vulnerable. »

As the administration looks for ways to demonstrate to voters that it is focused on cutting their costs, officials on Tuesday announced additional changes to the federal student loan system aimed at helping more eligible borrowers pay off their debt sooner. Biden’s previous rulings canceled student loan debt for some 700,000 borrowers at the end of March, totaling more than $17 billion in relief. But there is little evidence so far that voters are giving him political credit for that, as many of his fellow Democrats urge him to do more in what appears to be a difficult medium-term environment.

Limits to Biden’s power

The White House has touted Biden’s trip to Portsmouth as a chance to show how he’s using every tool at his disposal to drive down prices for Americans while investing in the country’s infrastructure to move goods faster and more efficiently. .

But it was yet another foray into the country that only underscored the limits of what it can do quickly to improve outcomes for families right now.

While the focus on Tuesday was on the bipartisan infrastructure law he signed last year, the most memorable part of Biden’s speech was his solemn attempt to prepare Americans for continued economic turmoil. to come, as he said he was doing his best to deliver on his campaign promise to “build this economy from the bottom up and from the middle out.”

“The fact is that we are in a situation where the war in Ukraine is going to continue to wreak havoc on the world economy. It will wreak havoc on energy. It will wreak havoc on food,” he said. Biden said. .

He noted that Russia’s invasion of Ukraine has “pushed up gas and food prices around the world.” Calling Russian President Vladimir Putin “a big reason for inflation,” Biden worked in the administration’s fanciful phrase explaining soaring gas and energy prices as “Putin’s price hike” – a attempt to blunt GOP messaging on high prices being his own fault.

Alluding to the food insecurity issues highlighted by Yellen, Biden also pointed out that Ukraine and Russia are “the two main breadbaskets of the world.”

“A lot of people are hurting. It makes a big difference, it makes a big difference – the cost of a dozen eggs, the cost of a gallon of gas, that’s significant,” the president said, making referring to his own financial situation. fights earlier in his life to emphasize his empathy for what Americans are going through.

While it’s proving difficult for many Americans to connect their pressing concerns to infrastructure improvements that will take place over several years, at the Portsmouth Port Authority, Biden tried to highlight how billions of dollars in Improvements at US ports — thanks to the $1.2 trillion infrastructure bill — could alleviate supply chain issues that have hampered the country’s economic recovery.

Signs point to more economic turmoil as war in Ukraine escalates

He noted Portsmouth Harbor supports more than 2,300 jobs, highlighting how a recently completed $18.2 million Army Corps of Engineers project to widen Portsmouth Harbor’s turning basin had made ” easier, faster, cheaper and safer for ships to enter”. and out.” Without a planned $1.7 million dredging project included in the new infrastructure law, the port might have had to turn away business, he said.

“We are sending a message. This port is open for business and will be for a long time,” the president said.

“There’s so much more to this law,” Biden said after detailing road and bridge repairs, efforts to ensure clean drinking water by upgrading aging pipes and expanding high-speed internet access. . “I’m not going to bore you with the rest – it’s important. Listen, we’ve come a long way and we have an amazing opportunity ahead of us. But we know families are still struggling with higher prices. “

Biden praised New Hampshire Sen. Maggie Hassan, one of the most vulnerable Democratic incumbents, and Rep. Chris Pappas, who is trying to keep his job in New Hampshire’s 1st congressional district, for helping to port upgrade.

In a nod to independent voters in the region, Hassan highlighted his work with Republicans in Congress to pass the infrastructure measure, citing the investments as “the foundation to ensure that families, small businesses and our entire New Hampshire economy can prosper.”

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