On The Money — Biden attacks GOP over deficit

President Biden is criticizing Republicans’ fiscal policy as the debt ceiling deadline looms. We’ll also look at China’s potential economic rebound and whether world economists expect a recession this year. 

But first, guess which two senators were seen high-fiving at the World Economic Forum in Davos.

Welcome to On The Money, your guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

Biden knocks ‘fiscally demented’ Republicans

President Biden on Monday called Republicans “fiscally demented” and knocked GOP priorities during the keynote speech at the National Action Network’s annual breakfast to mark Martin Luther King Jr. Day.  

“They’re gonna talk about big-spending Democrats again. Guess what? I reduced the deficit last year by $350 billion. This year, the federal deficit is down $1 trillion-plus. That’s a fact. And there’s gonna be hundreds of billions reduced over the next decade. But so what? These guys are fiscally demented, I think. They don’t quite get it,” Biden said of Republicans.

• Biden in his speech criticized Republicans for their economic stances in light of disparities faced by minority communities.
  
• The president said he’s “ready to work” with Republicans who just took over the House, but said he was disappointed by the first few bills put forward in the chamber.  

Biden knocked Republicans’ bills to defund the IRS and implement a national sales tax — and vowed to veto the legislation if it gets through Congress.   

“What in God’s name is that all about? … That’s how they’re starting their new term,” Biden said. “If any of these bills happen to reach my desk, I will veto them.” 

Read more from The Hill’s Julia Mueller. 

EYEING CHINA

Why China’s potential economic rebound could boost the US  

China could bounce back from its pandemic reopening swoon both stronger and sooner than expected, offering a rare source of optimism for the U.S. economy amid rising recession fears.  

The Chinese economy grew just 3 percent in 2022 and rose at an annual rate of 2.9 percent in the fourth quarter, according to statistics released Monday by Beijing.

While that’s sharply down from its 8.1 percent expansion in 2021, both the annual and quarterly growth rates beat expectations and offered hope for a swift 2023 recovery.  

• China still faces several obstacles as it crawls out of a pandemic-induced slump, including issues within its real estate markets and the country’s ongoing refusal to approve Western COVID-19 vaccines with greater efficacy.
  
• But economists are hopeful that a recovering Chinese economy could keep up demand for U.S. products and reduce pressure on supply chains as Americans face a potential recession this year.  

“China’s reopening — uneven or not — is well underway and may be a catalyst for supply chain fixes and more global demand,” wrote Jeffrey Buchbinder and Thomas Shipp of LPL Research in a Tuesday analysis.

Sylvan has the details here.

VIRTUAL EVENT INVITE

The Future of Cities: Mayor’s Forum, Thursday, Jan. 19 at 1 p.m. ET/10 a.m. PT

America’s cities are diverse, dynamic and constantly evolving. As mayors gather in Washington for the U.S. Conference of Mayors Winter Meeting, join The Hill for our annual discussion with leaders from cities large and small. Mayors Muriel Bowser (D.C.), Andre Dickens (Atlanta), James Hovland (Edina, Minn.), Wade Kapszukiewicz (Toledo, Ohio), Elizabeth Kautz (Burnsville, Minn.) and Jim Ross (Arlington, Texas) join The Hill’s Bob Cusack. RSVP today to save your spot.

DEADLINE LOOMS

What to know about the debt ceiling deadline  

Washington is gearing up for a fight over the fast-approaching debt ceiling limit after Treasury Secretary Janet Yellen announced last week that the country will hit its borrowing cap of around $31.4 trillion on Thursday.

• Thus far, lawmakers have held firm on their positions on the debt limit.
  
• Democrats are pushing for a swift raise in the ceiling and Republicans are reluctant to negotiate without guarantees of spending cuts — a position the White House has said it will not negotiate on.  

As the debt limit approaches, lawmakers will be pressured to take legislative action to avoid the potentially dangerous fallout of an American default on its national debt.  

The Hill’s Stephen Neukam explains here. 

RECESSION EXPECTATIONS

2 in 3 economists expect global recession this year: World Economic Forum survey 

Nearly two-thirds of leading world economists said that a global recession is likely this year and there is near unanimity that there will be weak economic growth in the U.S. and Europe, according to a new survey. 

The World Economic Forum’s Chief Economists Outlook echoes expert opinions that a recession could be nearing in 2023, as major economies attempt to quell inflation. 

• On inflation, though, the 22 world economists are a bit more optimistic. Just 24 percent of those surveyed expect high inflation in the U.S., while 57 percent say it is likely in Europe. Just 5 percent of economists polled expect high inflation in China.
  
• As the Federal Reserve has taken steps in recent months to fight inflation by raising interest rates, a majority of world economists in the new survey said that a further tightening of monetary policy in the U.S. and Europe is on the table for the next year. 

The Hill’s Stephen Neukam has the details here.

Good to Know

The percentage of Americans who postponed medical care payments due to cost has grown in the past year, according to a new Gallup poll.

The poll, published on Tuesday, found that 38 percent of respondents said they have put off scheduled medical care payments due to cost, a 12-point increase from the past two years. 

Other items we’re keeping an eye on: 

• The University of Texas at Austin has barred access to the social media platform TikTok on its Wi-Fi network after Texas Gov. Greg Abbott (R) banned the application from use on government devices.
  
• A group of GOP Wyoming state lawmakers want to end electric vehicle sales there by 2035, saying the move will help safeguard the oil and gas industries.
  
• New York will offer abortion medication free-of-charge at four city-run health clinics, Mayor Eric Adams (D) announced Tuesday as he laid out an agenda to repair health care inequities for women in the city.
  
  

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.