(Bloomberg) -- President Joe Biden vowed to not allow the US to default on its debt, calling on Congress to raise the debt-ceiling and chastising Republicans seeking to leverage the standoff to force spending cuts.
Biden’s State of the Union speech Tuesday hewed heavily to economic themes, striking a blue collar tone in calling for higher taxes on billionaires and tax buybacks, new consumer protections and antitrust efforts, while urging Congress to break through partisan gridlock and pass new measures.
He invoked the debt ceiling increases under his predecessor in calling on Republicans to not threaten a default as a condition of talks on fiscal reform that are in early stages after a meeting between Biden and House Speaker Kevin McCarthy last week.
“They lifted the debt ceiling three times without preconditions or crisis. They paid America’s bills to prevent economic disaster for our country. So tonight, I’m asking this Congress to follow suit,” Biden said. “Let us commit here tonight that the full faith and credit of the United States of America will never, ever be questioned.”
Biden entered the joint session just after 9 p.m. in Washington to applause and began speaking at 9:08 p.m. It generated a series of split screen moments, with Democrats and Vice President Kamala Harris standing and cheering while McCarthy and Republicans sat silently.
The speech — clocking in at one hour and 12 minutes and a de facto soft-launch of an expected reelection campaign — drew on many familiar Biden themes, including a push to bolster the middle class. In excerpts released Tuesday evening, he urged Congress to come together, despite partisan differences.
New Executive Actions
“To my Republican friends, if we could work together in the last Congress, there is no reason we can’t work together and find consensus on important thing in this Congress as well,” Biden said. “I think the people sent us a clear message, fighting for the sake of fighting, power for the sake of power, conflict for the sake of conflict gets us nowhere.”
The speech included a series of new executive actions and a list of proposals to Congress, including raising a tax on stock buybacks, a minimum tax on billionaires, a law banning targeted advertising online for children and young people, and a law to strengthen antitrust enforcement.
“The tax system is not fair — it is not fair,” Biden said. “Let’s finish the job. There’s more to do. We have to reward work, not just wealth.”
Other guests invited by the administration hinted at likely legislative pushes on abortion rights and an assault weapons ban. All are unlikely to pass the current, divided Congress.
Biden offered hints of his forthcoming budget, which he will release next month, saying he will reduce the deficit by $2 trillion, without specifying a time period. He also repeated a pledge that no proposed tax increases would affect people earning less than $400,000 a year.
Biden touted his accomplishments and legislative victories in the last Democratic-controlled Congress at a time when polls indicate voters are giving him little credit for it. More than six in 10 Americans don’t believe the president has accomplished much during his first two years in office, despite Congress’s passage of major legislation under Democratic control, according to a Washington Post/ABC News poll conducted between Jan. 27 and Feb. 1.
Biden made glancing reference to inflation, which became a major headwind for him and has launched the Federal Reserve on a rate hiking cycle that could eventually trigger a recession. Biden struck an upbeat tone and signaled that he is confident that inflation is receding.
“We’re better positioned than any country on Earth. But We have more to do, but here at home, inflation is coming down. Here at home, gas prices are down $1.50 a gallon since their peak. Food inflation is coming down — not fast enough, but coming down,” he said.
Biden at one point sparred with jeering Republicans, after he said some of them favored cuts to Medicare and Social Security. McCarthy shook his head silently, while firebrand conservative Representative Marjorie Taylor Greene, of Georgia, stood and shouted over Biden, apparently shouting “liar” at him.
“So folks, as we all apparently agree, Social Security and Medicare are off the books now, right?” he said. “We’ve got unanimity.” McCarthy has said cuts to the two programs are off the table but some Republicans have called for reforms.
Despite the occasional skirmishes, Biden resurfaced his so-called “unity agenda” efforts from the speech a year earlier, including efforts to curb opioid use and deaths. Biden will announce a diplomatic push to curb the inflow of fentanyl, though it’s not clear if he will single out China, a source of materials used to produce fentanyl.
Biden is navigating heightened tensions with the world’s second-biggest economy, after the downing of an alleged Chinese surveillance balloon on Saturday. “I am committed to work with China where it can advance American interests and benefit the world. But make no mistake about it: as we made clear last week, if China threatens our sovereignty, we will act to protect our country.”
“Name Me One’
Biden cast an image of an ascendant US and a China mired in challenges, and deviated from the prepared remarks sent to press to ad-lib a line about China’s leader: “Name me a world leader who’d change places with Xi Jinping — name me one, name me one,” he said.
Biden nodded to his push to expand the middle class, and to bipartisan victories, like laws expanding infrastructure spending and subsidizing domestic production of semiconductor chips. He will tailor his economic pitch to smaller communities who’ve seen major businesses shuttered.
“Maybe that’s you watching at home. You remember the jobs that went away. And you wonder whether a path even exists anymore for you and your children to get ahead without moving away. I get it,” Biden said. “That’s why we’re building an economy where no one is left behind.”
Biden also urged Congress to implement immigration reform — or at least a slimmed-down version.
“If we don’t pass my comprehensive immigration reform, at least pass my plan to provide the equipment and officers to secure the border. And a pathway to citizenship for Dreamers, those on temporary status, farm workers, essential workers,” he said.
He also called for police reform, which stalled in the last Congress, by raising the death of Tyre Nichols. He recognized Nichols’s mother and stepfather, who were in attendance, during the speech. “Let’s come together and finish the job on police reform. Do something,” he said.
Biden stressed that the Covid pandemic is largely behind the US and tout job gains — which some analysts say are a headwind to the Federal Reserve’s efforts to ease inflation, and may raise the chances of further rate hikes and a recession.
“We’re the only country that has emerged from every crisis we’ve ever entered stronger than when we got into it,” Biden said.
After he finished, Biden basked in well-wishes from lawmakers, justices and other attendees who complimented his speech. “I was worried it was too long,” he said with a grin to one.
(Updates with latest from speech throughout)
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