This week in Bidenomics: So much winning

President Biden is on a roll. Will anybody notice?

The resolution of the debt-ceiling standoff is a win for Biden, and for everybody. At the outset, Biden said he wouldn’t agree to any compromises in order to raise the federal borrowing limit, and at the end he did agree to some compromises. But only a handful of political geeks on cable news care.

Almost no one will notice the modest spending cuts Biden agreed to, and Congress suspended the debt ceiling all the way into 2025, after the next presidential election. Biden said all along he was confident Republicans and Democrats would reach a deal, and he was right. Markets barely wavered through the whole pointless drama.

“He's prone to verbal gaffes, he looks frail, and most Democrats would prefer another nominee,” Greg Valliere, chief strategist for AGF Investments, wrote in his morning newsletter on May 31. “But President Biden emerges from the budget brawl in surprisingly good shape.”

The employment report for May showed the economy created 339,000 new jobs, far beyond economists’ expectations, again. “The survey pains a picture of a robust labor market with a seemingly inexhaustible appetite for new workers,” Gordon Gray of the American Action Forum observed in an analysis. There were a few signs of weakness in the details, leaving the overall picture a kind of Goldilocks scenario that might dissuade the Federal Reserve from hiking interest rates further when it next meets in mid-June.

Gas prices, the unofficial barometer of well-being for many Americans, average around $3.60 per gallon, well within the manageable range. Gas prices are down nearly 30% from their peak last June, a major relief for many Americans as the summer driving seasons starts. Inflation is moderating, too, with the next report on June 13 likely to show it staying under 5% and perhaps falling.

“The Biden economic plan is working,” Biden said in a June 2 statement. “My economic plan will continue to deliver good jobs for the American people.”

Biden will continue pointing to the surging job market as long as it bolsters his reelection bid. Yet he's also pivoting. Biden is a center-left president, but sometimes he’s more left than center, and other times he’s more center than left. His first two years were leftist, with huge amounts of government intervention via COVID relief, infrastructure spending, green energy incentives, and a bit of social welfare.

Biden is now moving to the center, as he runs for reelection. If the 80-year-old Biden stays healthy, there won’t be any meaningful opposition in the Democratic primaries, which means he won’t have to pander for progressive votes from the most liberal wing of the party. He should win the nomination easily.

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In the 2024 general election, Biden could have a tougher job winning centrists and independents than he did in 2020, when many such voters went for Biden merely as a repudiation of incumbent President Donald Trump. Maybe Biden will get lucky in 2024 and run against an even weaker Trump, besieged by criminal investigations and maybe even convicted. But Biden will have new vulnerabilities of his own, as an eighty-something dogged by doubts about his clear-headedness and stamina.

The debt-ceiling deal was a shrewd move to the center for Biden. He showed he can do business with Republican House Speaker Kevin McCarthy, substantiating his claims of bipartisanship. He also notched another demonstration of competence, even if that just means the government will continue to function as normal. His acceptance of the mild spending cuts in the bill, along with the speeding of a fossil-fuel pipeline, and a new work requirement for a few welfare recipients, will sit well with moderates, if they know Biden signed off on these things.

Another issue splitting the center and the left may soon go Biden’s way, even if it doesn’t look that way on the surface. While the debt-ceiling standoff was dominating the headlines, Congress also passed a bill that would kill Biden’s play to repeal up to $20,000 of student debt per borrower. Biden plans to veto the bill, and there aren’t enough votes in Congress to override Biden’s veto. But the Supreme Court may soon do what Congress can’t, by ruling Biden’s debt-cancellation order unconstitutional, in an opinion likely by the end of June.

In the cynical world of politics, that could be an ideal outcome for Biden. He’ll get credit among progressives for trying, while centrists (and conservatives) who think it’s an undeserved federal giveaway won’t have to stomach it. Biden can then say that cancelling student debt is a job for Congress to do through legislation, and make it a potent 2024 campaign issue.

With the cards falling Biden’s way, for now, Biden’s challenge is getting voters to credit him for what’s going right. This has been a persistent Biden weakness. His approval rating is a meager 41%, remarkably low for a president presiding over an economy with an unemployment rate consistently below 4%. Inflation clearly bums people out, but Americans seem like they want to be in a bad mood. Many worry about a looming recession, despite the strong job market, and Morning Consult now finds gathering gloom about the prospect of artificial intelligence killing jobs. Americans are dialed into pessimism.

Does “Sleepy Joe” have a messaging problem? Maybe. The real test will be whether Biden’s approval ratings improve as inflation drops during the next 12 months and Americans feel less ravaged by rising prices. As for the recession everybody seems to be worried about, it still isn’t here, yet Biden hasn’t been able to talk up the national mood. He must wonder how many more problems he needs to solve to get a little love from voters.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman

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