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'Peril Into Possibility': Biden's Speech Featured A Bold Plan To Reshape The Economy

MARY LOUISE KELLY, HOST:

The U.S. economy is on track to grow this year at the fastest pace in nearly four decades. President Biden is celebrating that turnaround from the coronavirus recession, and he hopes to build on that success. In a speech to Congress last night, he outlined an ambitious plan to reshape the economy for years to come.

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PRESIDENT JOE BIDEN: I come to talk about crisis and opportunity by rebuilding the nation, revitalizing our democracy and winning the future for America.

KELLY: Biden is betting that having embraced federal help during the pandemic, Americans will welcome a more active role for the government going forward.

NPR chief economics correspondent Scott Horsley is here. Hey, Scott.

SCOTT HORSLEY, BYLINE: Good be with you, Mary Louise.

KELLY: So let's just tally up. He is proposing trillions of dollars in new spending. This would go toward things like education, infrastructure, cash payments to American families. How does the president frame the goal of all this spending?

HORSLEY: President Biden says it's not enough to just beat back the coronavirus because even before the pandemic struck, a lot of families were having trouble getting ahead. So Biden is proposing a larger role for the federal government to provide free preschool, for example, and community college, to promote clean energy to fight climate change and rebuild broadband networks. Biden sees all these investments in the country's economic future as a way to compete better against countries like China. And he's proposed paying for this, at least in part, with higher taxes on corporations and the wealthy.

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BIDEN: It's time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share...

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BIDEN: ...Just their fair share.

HORSLEY: The tax hikes are already facing lots of pushback (inaudible) community and congressional Republicans. So it's going to be an uphill fight for the White House. And what's going to be interesting to see is to what extent the pandemic and the federal government's response to it has made people more open to government action on other challenges.

KELLY: And meanwhile - let me circle us back to that, what I said in the intro. U.S. economy is on track to grow at the fastest pace in four decades. It's amazing. What is driving it?

HORSLEY: The federal government has moved aggressively to put money into people's pockets and vaccine into their arms, and that has people feeling liberated to spend more freely. For the moment, they're still spending more on stuff like cars and clothes and groceries than they are on services like haircuts and restaurant meals. But chief economist Nela Richardson, who's with the payroll company ADP, expects that will shift this spring and summer as more COVID restrictions are eased and as people feel more comfortable getting on airplanes and going out to ball games.

NELA RICHARDSON: You have a lot of people with some pretty robust savings itching to get back to former pastimes, like going to a movie or traveling. And so I think those hard-hit industries have the most to gain from the reopening, the safe reopening of the U.S. economy.

HORSLEY: The economy grew at an annual rate of 6.4% in the first three months of the year. And forecasters say growth could be even stronger in the months to come. That's considerably better than we've seen, for example, in the eurozone, where the vaccine rollout has proceeded much more slowly. In fact, the U.S. is expected to have the strongest annual growth this year since 1984, when Ronald Reagan was in his first term in office.

KELLY: It's so striking to hear that optimism, Scott, at a moment when so many people are still out of work. How are we doing at getting jobs to come back?

HORSLEY: Yeah, that is taking longer. Employers did add more than 900,000 jobs last month, and this month's job gains may be even stronger. But it's going to take another eight or nine months of that level of job growth to get back all the jobs that were lost last year. At last count, we were still at 16 1/2 million people getting some form of unemployment assistance. At least a third of them have been out of work six months or more. At the same time, you have some employers saying they can't find enough people to wait on tables or work in factories. And the Federal Reserve chairman, Jerome Powell, was asked this week, how can it be jobs are going unfilled when so many people are out of work?

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JEROME POWELL: One big factor would be schools aren't open yet, so there's still people who are at home taking care of their children and would like to be back in the workforce, but can't be yet. There are virus fears that are weighing on people, so some people don't want to go back to work.

HORSLEY: Some employers have even complained that government relief payments are keeping people on the sidelines. Powell says that's not clear, but he notes those payments will run out this summer. So if they are a factor, they won't be for too much longer.

KELLY: Thank you, Scott.

HORSLEY: You're welcome.

KELLY: NPR's Scott Horsley. Transcript provided by NPR, Copyright NPR.