Joe Biden: Liz Truss tax cuts a ‘mistake’ and ‘I wasn’t the only one’ who thought so

Posted on October 15, 2022Comments Off on Joe Biden: Liz Truss tax cuts a ‘mistake’ and ‘I wasn’t the only one’ who thought so

Joe Biden has called Liz Truss’s abandoned UK tax cut plan a “mistake” and said he is worried that other nations’ fiscal policies may hurt the US amid “worldwide inflation”.

Biden said it was “predictable” that the new British prime minister on Friday was forced to walk back plans to aggressively cut taxes without identifying cost savings, after Truss’s proposal caused turmoil in global financial markets.

It marked an unusual criticism by a US president of the domestic policy decisions of one of its closest allies.

“I wasn’t the only one that thought it was a mistake,” Biden said. “I disagree with the policy, but that’s up to Great Britain.” He criticised a lack of “sound policy” in other countries in regard to economic growth.

Biden’s comments came after weeks of White House officials declining to criticise Truss’s plans, though they emphasised they were monitoring the economic fallout closely. The US president was speaking to reporters at an Oregon ice-cream shop during an unannounced campaign stop for the Democratic candidate for governor, Tina Kotek. Democrats face a tough US political environment amid Republican criticism of their handling of the economy.

Biden said he was not concerned about the strength of the dollar – it set a new record against sterling in recent weeks, which benefits imports but makes US exports more expensive to the rest of the world.

The president said the US economy “is strong as hell … I’m concerned about the rest of the world. The problem is the lack of economic growth and sound policy in other countries.

“It’s worldwide inflation, that’s consequential.”

Truss’s own new chancellor, Jeremy Hunt, has said Truss and his predecessor Kwasi Kwarteng’s mini-budget went “too far, too fast” as he effectively signalled the demise of the prime minister’s economic vision.

“We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling, but at the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people.”

Hunt is expected to announce that plans to reduce the basic rate of income tax next April will be pushed back by a year. The cut to 19% will now take effect at the time previously proposed by Rishi Sunak, the former chancellor, who was Liz Truss’s main leadership rival.

With Associated Press

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Comments Off on Joe Biden: Liz Truss tax cuts a ‘mistake’ and ‘I wasn’t the only one’ who thought so