Biden funded new factories and infrastructure projects, but Trump might cut the ribbons

WASHINGTON – All that remains is for the president-elect Donald Trump to put his name on it – if he wants to.

Trump won the White House largely because of voters’ frustration with high prices and a sense that the United States needs major change. But if he comes to power in January, Trump will inherit an economy primed for growth.

The unemployment rate is low, inflation is declining and President Joe Biden’s administration has drawn up a ready-made list of infrastructure projects that could move from theory to reality in the coming years. There’s the TSMC computer chip plant in Arizona, the new Hyundai electric vehicle plant in Georgia and a modernized I-375 in Michigan, among thousands of ongoing projects that will take years to complete.

All that means it could be Trump, rather than Biden, who gets to tell Americans that he has built the country back better. At least if he decides to continue the projects.

Biden himself acknowledged last week that the positive economic consequences of his policies would occur after his term ends in January.

“Much of the work we have done is already being felt by the American people, but the vast majority will not be felt, but will be felt over the next decade,” he said in a speech in the Rose Garden. “It will take time, but it is there. The way forward is clear.”

Trump wants to reverse Biden’s policies, but construction is already underway

While Trump railed against Biden’s record during his campaign, he has provided few details about which initiatives he might scrap. Trump said in September that he would “revoke any unused funds under the incorrect name Inflation Reduction Act ‘ and said on Joe Rogan’s podcast that tariffs would do more for production than the financing provided by the CHIPS and Science Act.

But Biden aides privately told The Associated Press that they expect Trump to move forward with planned projects and take credit for Biden’s achievements, much like Republicans in Congress who have celebrated the opening of factories and infrastructure developments in their districts. but voted against it.

The administration has spent millions of dollars installing road signs to promote Biden’s role in the projects; all Trump would have to do is relabel them with his own name. Biden aides are confident that Trump won’t want to make cuts to programs that help states he won in this year’s elections, even as Republicans seek a symbolic repeal of some provisions to pass some of their own to help finance tax reduction plans.

When Karoline Leavitt, spokeswoman for the Trump-Vance transition, was asked about this possibility, she said: “The American people re-elected President Trump by a resounding margin, giving him a mandate to keep the promises he made during the campaign , to achieve. He will deliver.”

Natalie Quillian, Biden’s White House deputy chief of staff, said the administration’s programs are already starting to make a positive difference to the economy.

“We have already announced investments for 70,000 infrastructure and clean energy projects, catalyzed nearly $1 trillion in private sector investment, lowered prescription drug prices and created 1.6 million construction and manufacturing jobs,” she said . “Over the coming months, we will continue to review the tape and ensure that Americans benefit from this president’s agenda for years to come.”

Trump enters the White House as the economy improves

By many measures, Trump is also inheriting an increasingly healthy economy, despite his claims that conditions are dire.

The Republican won the election with an unemployment rate of a healthy 4.1%, inflation of 2.4% and a cut in interest rates by the Federal Reserve in a way that could support additional growth. Federal Reserve Chairman Jerome Powell summed up the situation last week by saying the economy is “generally strong.”

However, voters felt the economy was weak. They chastised Democrats for inflation that reflected supply chain challenges after the pandemic, the impact of government aid that also boosted job growth and Russia’s 2022 invasion of Ukraine that caused spikes in energy and food prices.

However, voters seemed less concerned with the overall inflation rate than with the changes in price levels that have occurred over the past four years. Nearly 9 in 10 voters cited inflation as an important factor in their choice in this year’s election, with Trump winning a clear majority among this group, according to AP VoteCast, a comprehensive survey of more than 120,000 voters.

Still, economists who advised Trump and previously worked with Trump believed the economy was not as solid as the numbers suggest. They emphasized the high level of government debt that has fueled growth, even as Trump himself showed little willingness to cut deficits during his previous stay in the White House.

“Government spending keeps the economy going,” said Joseph LaVorgna, chief economist at the White House National Economic Council during the Trump presidency.

LaVorgna also noted that much of the recent job growth has come from government and health care hiring, rather than from manufacturing and other for-profit sectors.

Possible push to embrace renewable energy and electric vehicles

Some Republican lawmakers acknowledge that the energy tax credits that were part of the Inflation Reduction Act were positive and should be preserved. Eighteen Republican House members sent House Speaker Mike Johnson a message letter in August to ask him to keep the tax credits.

Economists who support Trump also note that electric car sales growth could jump under the new administration, which has the backing of Tesla CEO Elon Musk.

Trump has wanted to remove Biden’s incentives for electric cars, which are part of the Inflation Reduction Act. But after receiving Musk’s support, Trump said he is “for electric cars … because Elon supported me very strongly.”

That simple shift from Trump talking up EVs could remove the politics from the issue and ensure the new president fulfills a goal set by Biden, says economist Stephen Moore, an informal Trump adviser and economist at the Heritage Foundation, a conservative think tank.

“With Biden gone, the EV industry will make a comeback,” Moore said. “Biden made electric vehicles toxic because half the country hated Biden and the other half loved him. The people who hated Biden wouldn’t buy an electric car out of conscience.”