Biden plan to transform US economy now focused on cost-cutting

President Joe Biden showed on Tuesday how much his ambitions to transform the U.S. economy have been hijacked by the fast-rising consumer prices that are weighing on his presidency.
 

As he unveiled a refurbished economic plan during his State of the Union address, Biden used a word seven times that he never uttered during his last address to a joint session of Congress nearly a year ago: inflation.
 

"My top priority is getting prices under control," Biden said. "One way to fight inflation is to drive down wages and make Americans poorer. I think I have a better idea to fight inflation: lower your costs, not your wages," he said in reference to U.S. companies.
 

Democrat-backed spending aimed at keeping people safe and out of poverty during the height of the pandemic, and rebuilding infrastructure in the years ahead helped grow the U.S. economy by 5.7% in 2021, the most since 1984, after a 3.4% decline in 2020.
 

That growth has collided with pandemic-related shortages of goods and labor, pushing prices higher. In the 12 months through January, the CPI jumped 7.5%, the biggest year-on-year increase since February 1982. Biden's approval rating, meanwhile, sits at 43%, close to the lowest level of his presidency according to Reuters/Ipsos polling.
 

Those facts, combined with Democrats' inability to pass the president's signature "Build Back Better" plan that would fund childcare and raise wages for health workers through higher corporate taxes, have prompted a reboot of Biden's economic message ahead of the Nov. 8 midterm elections for control of Congress.
 

Biden now hopes repackaging many of the same policies in his $1.7 trillion Build Back Better bill as kitchen table cost-cutters will gain traction with the voting public, who will decide whether to extend the majority held by Biden's fellow Democrats or to revoke it.
 

Many economists have said the policies could reduce long-term inflationary pressures but have come to no conclusion about any effect on the short-term spike.
 

The adjusted messaging has affected other issues, too. The president entered office saying climate change was one of his four top issues, but it was relegated to a brief mention on Tuesday explicitly tied to inflation.
 

"Let's cut energy costs for families an average of $500 a year by combating climate change," he said.
 

Biden also introduced a new promise absent from his speech last April, and rare on the campaign trail - cutting the deficit. "My plan to cut inflation will lower your costs and lower the deficit," he said, while noting that it has already shrunk under his tenure.

(Reporting by Trevor Hunnicutt; Editing by Heather Timmons and Alistair Bell)