Colorado leaders respond to federal report on nation's economy

Colorado's political leaders responded to a report on Thursday that signals the U.S. economy has entered a recession.

According to data from the Bureau of Economic Analysis, the country’s gross domestic product (GDP) shrank by 0.9% in the second quarter, marking the second consecutive quarter of negative growth. This comes as the Federal Reserve announced it will raise interest rates by 0.75 points to combat persistent inflation.

“After historic economic growth – regaining all private sector jobs lost during the pandemic – we knew the economy would slow down as the Fed acts on inflation,” President Joe Biden said in a statement on Thursday. “Our job market is strong, spending is up, and unemployment is down. We have the resilience to weather the transition.”

Economists have consistently warned that the U.S. economy could enter a recession if policymakers weren’t able to get a grip on inflation. Consumer prices have increased by 9.1% over the last year, the largest increase in over 40 years, according to the Bureau of Labor Statistics.

Colorado Republicans pointed the blame for a recession at the Biden administration and Democrats' policies.

“This recession might as well be named the 'Biden-Bennet Recession' because both of them are fully responsible for its occurrence,” Kristi Burton Brown, chair of the Colorado GOP, said in a statement. “Joe Biden, Michael Bennet, and the Democrats' reckless spending has forced the United States into an unnecessary economic downturn - after a year of Coloradans already paying painfully high gas prices and record high inflation.”

The Independence Institute in Denver, a free-market think tank, said passing Initiative 31, which seeks to lower Colorado's income tax rate from 4.55% to 4.4%, would provide relief for taxpayers in the state.

“Record inflation paired with a recession is a devastating double whammy for Colorado workers and small businesses,” said Jon Caldara, the think tank's president. “Putting the state on a path to zero income tax will help produce the economic rebound Coloradans desperately need.”

Meanwhile, Democrats on Thursday pushed for passage of the federal Inflation Reduction Act. The bill would spend more than $433 billion on climate and energy-related programs and expanding Affordable Care Act subsidies, among other things.

U.S. Sen. Michael Bennet, D-Colo., described the legislative package as “a very big deal.”

“This historic investment in climate and clean energy will cut U.S. climate pollution by 40% by 2030, and it includes my priorities to accelerate solar and wind energy, boost U.S. clean energy manufacturing, invest in carbon capture, and reform oil and gas leasing,” Bennet said in a statement.

Denver Mayor Michael Hancock, a Democrat, also touted the bill saying it will improve the U.S.’ energy security.

“Climate action is a priority for Denver,” Hancock said in a statement. “This bill will improve our energy security, address our climate crisis, create thousands of new jobs and help lower energy costs in the future.”

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