Biden visits Port of Los Angeles as high inflation persists as threat
The Port of Los Angeles is a testament to President Joe Biden’s failed efforts to tackle what he calls his top economic priority: inflation.
Biden will speak at America’s busiest port on Friday, with inflation lingering as a problem that has eluded his policy adjustments, negotiated deals with the private sector, infrastructure spending and regulatory measures.
The government announced on Friday that consumer prices rose 8.6% in May from a year ago. It’s the worst reading in more than 40 years and a worrying sign for the economy, as rate hikes by the Federal Reserve have yet to curb inflation as gasoline prices rise.
Separate AAA reported that average U.S. gasoline prices hit a record high of $4.99 a gallon, an increase that exceeded the president’s earlier efforts to reduce headline inflation. The pain at the pump is hurting Biden’s public approval ahead of the midterm elections.
The Port of Los Angeles moved to 24-hour operations last October under an agreement the White House helped manage. The aim was to clear backlogs of ships awaiting berthing and containers awaiting influx into the country, a lockdown that was driving up prices as the world began to recover from the coronavirus pandemic.
The port is currently taking out a record 200,000 containers on a 30-day moving average. But the drivers of inflation shifted to rising energy and food costs following Russia’s invasion of Ukraine.
Gene Seroka, executive director of the Port of Los Angeles, said many levers are driving improved performance in terms of getting goods to consumers and businesses faster. But he specifically credited the “federal government’s convening powers to bring people to the table” and the Biden administration’s focus on the supply chain.
“We have reduced the number of ships waiting to enter port by 75% this year,” Seroka said. “These guys are really working because we still have strong consumer demand.”
Strong consumer demand has been a mixed blessing for Biden. This reflects robust job growth and strong household balance sheets following the $1.9 trillion coronavirus relief package passed last year. But demand has consistently outstripped supply, pushing prices to levels that are forcing the Federal Reserve to try to slow growth and risk a recession.
The White House said Biden plans to say in his Friday remarks that the United States can fight inflation without falling into a downturn. This is because the economy is so strong with its 3.6% unemployment rate that it can withstand a downturn.
The president will also seek to portray inflation as a global challenge, triggered first by the pandemic and then by the Russian invasion of Ukraine. Biden is trying to refute criticism from Republican lawmakers that inflation is the result of overly generous government aid and his overly onerous restrictions on U.S. oil production.
Biden has tried to slow inflation by improving port operations and twice releasing oil from the U.S. strategic reserve, in addition to other regulatory initiatives and a national program that includes reducing the budget deficit and would require the Congressional approval.
Before inflation became an economic and political threat, Biden emphasized that his main goal was to improve the lives of middle-class workers. That could be put to the test as the union contract for the port expires on July 1 and workers try to boost their incomes and benefits.
Workers will continue to do their jobs after the contract expires, and it’s rare for a new contract to be pre-arranged, said Jennifer Sargent Bokaie, director of communications for the Coast Longshore division of the International Longshore and Warehouse Union. She said there is an agreement between the union and the Pacific Maritime Association, which represents the port, not to discuss the status of contract negotiations with the media.
The port visit comes as Biden hosted the Summit of the Americas in Los Angeles. On Friday, he will also announce a statement on migration and host a working lunch with heads of government and state attending the conference of nations in the Western Hemisphere.
And mindful of the campaign season, Biden will attend two fundraising receptions for the Democratic National Committee on Friday.