Joe Biden has branded Liz Truss’s abandoned UK tax cut plan a “mistake” and said he is concerned that other nations’ tax policies could hurt the US amid “global inflation”.
Biden said it was “predictable” Britain’s new prime minister would be forced on Friday to back away from plans to cut taxes aggressively without identifying cost savings, after Truss’s proposal sent global financial markets into turmoil.
It marked an unusual criticism by a US president of the domestic policy decisions of one of his closest allies.
“I wasn’t the only one who thought it was a mistake,” Biden said. “I think the idea of cutting taxes for the super rich at a time when … I don’t agree with the policy, but that’s up to Britain.” He has criticized the lack of “sound policy” in other countries regarding economic growth.
Biden’s comments came after weeks of White House officials refusing to criticize Truss’s plans, although they emphasized that they were closely monitoring the economic consequences. The US president was speaking to reporters at an Oregon ice cream parlor during an unannounced campaign stop for Democratic gubernatorial candidate Tina Kotek. Democrats face a tough American political environment amid Republican criticism of their handling of the economy.
Biden said he was not worried about the strength of the dollar, which hit 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 U.S. economy “is strong as hell … I worry about the rest of the world. The problem is the lack of economic growth and sound policies in other countries.
“It’s world inflation, that’s consequential.”
Truss’s new chancellor, Jeremy Hunt, has said the mini-budget by Truss and his predecessor Kwasi Kwarteng went “too far, too fast” as it effectively signaled the demise of the prime minister’s economic vision.
“We have to be honest with people and we’re going to have to make some very difficult decisions in both spending and taxation to reduce the debt, but at the forefront of our minds as we make those decisions will be how to protect and help struggling families. , companies and people”.
Hunt is expected to announce that plans to cut the basic rate of income tax next April will be delayed by a year. The 19% cut will take effect at the time previously proposed by Rishi Sunak, the former chancellor, who was Liz Truss’ main leadership rival.
With the Associated Press