State of The Union Biden Pushes for Economic Growth-WSJ Renewal

WASHINGTON—In his State of the Union address, President Biden emphasized economic gains and his past legislative accomplishments and called for bipartisan collaboration with the new GOP House majority—members of which at times booed and heckled his remarks.

Here are some key takeaways from the speech:

Economic optimism

Mr. Biden sought to pump up positive economic signs, including the low unemployment rate and easing inflation. But he avoided being too sunny and acknowledged that there is more work to do, as many Americans still feel pessimistic about the state of the economy.

Mr. Biden repeated the phrase “finish the job” as a refrain throughout the speech, stressing that his priority is to continue to build on the work of his first two years and asking Republicans to work with him.

Wall Street Journal Discount Subscription Renewal

The president highlighted his policies, including efforts to lower drug prices and invest in infrastructure and domestic chip manufacturing. His administration has had to grapple with the fact that much of the infrastructure spending will take years to work its way into the economy in the form of jobs and tangible projects. Meanwhile, Americans remain frustrated with prices and many reports having spent their pandemic savings.

“We’re better positioned than any country on Earth right now,” Mr. Biden said. “But we have more to do.”

Despite Mr. Biden’s efforts, the public is most frustrated with his management of the economy. A recent Washington Post-ABC poll found that 58% of Americans disapproved of his handling of the economy while 37% approved.

The unemployment rate was 3.4% last month, its lowest level since May 1969. And U.S. inflation eased in December for the sixth straight month following a mid-2022 peak as the Federal Reserve aggressively raised interest rates and the economy showed signs of cooling.

A unity pitch—and partisan tensions

Mr. Biden made a call for unity during a moment of stark divisions in Washington.

“You know, we’re often told that Democrats and Republicans can’t work together,” Mr. Biden said. “But over the past two years, we proved the cynics and the naysayers wrong. Yes, we disagreed plenty. And yes, there were times when Democrats went alone. But time and again, Democrats and Republicans came together.”

But the changed power dynamics in Washington were clear as new House Speaker Kevin McCarthy (R., Calif.) sat behind Mr. Biden during the address, often remaining seated while Vice President Kamala Harris and her fellow Democrats applauded, read more at Wall Street Journal Discount Subscription Renewal.

At one point, the president was booed and heckled as he criticized some Republicans for proposing cuts to Social Security and Medicare—referencing plans floated by Sen. Rick Scott (R., Fla.) and others—as GOP lawmakers cried that the criticism was false. Mr. McCarthy has said such cuts are off the table.

In response, Mr. Biden seemed to acknowledge that Republicans have backed away from the idea of the cuts. “If anyone is trying to cut Social Security, which apparently nobody is trying to do, I’ll stop them. I’ll veto it,” Mr. Biden said.

Mr. Biden sought to appeal to Republicans on subjects where they have had bipartisan success in the past, including a new push to crack down on illegal fentanyl distribution and efforts to address cancer research, mental health, and veterans.

The administration has worked with the GOP on those issues previously. Last year Mr. Biden called on the GOP to work with him to pass legislation to expand healthcare benefits for veterans, including those suffering from health ailments potentially linked to the inhalation of wartime “burn pits.” That bill passed with bipartisan support and Mr. Biden signed it into law in August.

Mr. Biden also referenced Republicans who have worked against him. He spoke about those who opposed his infrastructure law, saying those lawmakers still wanted projects funded in their districts. He said: “Don’t worry, I promised to be president for all Americans. I will fund those projects.”

No big policy swings

Following two years of major legislative action on issues such as infrastructure, technology, and guns with full Democratic control of Congress, Mr. Biden didn’t offer a sweeping new policy agenda. He stressed the need to build on the work so far and offered some economic pitches, as well as a set of proposals focused on areas he has worked on with the GOP previously.

The approach reflected the change in Congress. House Republicans are taking an aggressive stance against much of Mr. Biden’s agenda and launching investigations into his presidency and family.

Get 3 Years of Wall Street Journal Digital Subscription and Save 77%

On the economic front, Mr. Biden proposed quadrupling the 1% tax on stock buybacks that took effect in January. He also laid out some ideas that he has previously pitched and has failed to advance in Congress, including a tax on billionaires, capping the out-of-pocket cost of insulin for all Americans, and renewing the expanded child tax credit.

Mr. Biden also made clear that another policy priority was opposing Republican efforts to work against his agenda. More than once he said he would veto certain bills if they made it to his desk.

Debt debate

Shadowing the speech was the continuing clash between Mr. Biden and House Republicans over the looming deadline to raise the country’s debt limit.

GOP House members have called for cuts to government spending in exchange for voting to increase the nation’s borrowing limit. The White House has said there will be no negotiations over the debt limit, though past presidents of both parties have negotiated on the topic; during the Obama administration, then-Vice President Biden was the lead negotiator with Republicans on raising the debt ceiling in 2011.

“Let’s commit here tonight that the full faith and credit of the United States of America will never, ever be questioned,” Mr. Biden said, before reiterating that he won’t cut Social Security or Medicare.

Messrs. Biden and McCarthy began debt-ceiling talks last week. Speaking to reporters a day before the speech, Mr. McCarthy said: “We’ve been very clear that we’re not raising taxes and we’re not raising a clean debt ceiling.”

The Treasury Department in January began so-called extraordinary accounting measures to avoid default, so the U.S. can keep paying obligations to bondholders, Social Security recipients, and others until at least early June. That approximate deadline gives Congress a few months to raise or suspend the debt ceiling, currently at about $31.4 trillion. Raising the debt ceiling allows the government to pay for spending Congress authorized in the past, subscribe today to Wall Street Journal Discount Subscription Renewal, and save 77% off.

China tensions

While much of the speech was focused on domestic issues, Mr. Biden also addressed rising tensions with China, days after the U.S. shot down a suspected Chinese surveillance balloon.

“I am committed to working with China where we can advance American interests and benefit the world,” Mr. Biden said. “But make no mistake about it: as we made clear last week, if China threatens our sovereignty, we will act to protect our country. And we did.”

The balloon incident comes as the Biden administration has made competition with China a central tenet of its broader national-security strategy as the two countries face off over issues from Taiwan to trade and technology. The U.S. has been expanding its own military presence in the Asia-Pacific to counter Beijing’s rising influence.

Lawmakers in both parties have expressed concern over what was already a tense relationship with Beijing, while Republicans have criticized how long it took the U.S. to shoot down the balloon. The Biden administration has defended its actions, saying taking the craft down over the Atlantic Ocean was safer than doing so over land, where debris would pose a risk to people on the ground.

Secretary of State Antony Blinken was due to visit China, but his trip has been indefinitely postponed following the incident. Many Republicans have urged Mr. Biden to be more aggressive toward China, particularly on trade and technology issues.

Sharp Republican response

Arkansas Gov. Sarah Huckabee Sanders, known nationally for having served as press secretary in the Trump White House, gave the Republican response to Mr. Biden’s speech, stressing economic anxieties, as well as hot-button cultural issues such as critical race theory.

While Mr. Biden spent a portion of his speech appealing to Republicans to work together on key issues, nearly all of Ms. Sanders’s response was focused on assailing the president and his fellow Democrats, reports Wall Street Journal.

“In radical left America, Washington taxes you and lights your hard-earned money on fire, but you get crushed with high gas prices, empty grocery shelves,” she said.

Ms. Sanders also sought to emphasize Mr. Biden’s age. “At 40 I’m the youngest governor in the country,” she said. “At 80 he’s the oldest president in American history.”

She later added: “It’s time for a new generation of Republican leadership.”