The economic approach championed by the British leader to help bolster a struggling U.K. economy amid fears of recession has come under fire from the president.
The Foreign Secretary and the President talked at the reception.
On Tuesday, Biden said he was sick and tired of trickle-down economics and that the approach has "never worked".
The UK has to take difficult decisions to get its economy right, including removing a limit on banker's bonuses, according to Truss.
They are expected to meet at the UN General Assembly.
The so-called "trickle-down" style of economics, in which tax cuts to corporations and the rich will trickle down to benefit the whole economy, has been controversial.
The theory of supply-side economic policies and further income inequality has been concluded by other economists.
One of Truss's foreign ministers came to her defense after Biden said that Truss's approach can't be described as trickle down economics. The Foreign Office minister pointed out that the plan to cut energy bills was not in line with the definition of trickle-down economics.
The term trickle-down economics was popularized by Democrats in the 1980s as a way to describe President Ronald Reagan's economic policies of tax cuts.
According to trickle-down economics, tax breaks for corporations and the wealthy will trickle down and benefit all through jobs and economic growth. Reagan cut the personal income tax rate from 70% to 50% and the corporate tax rate from 46% to 40%. When Bush ran against him for president in 1980, he derided the theory asvoodoo economics. Thatcher had a key policy of trickle-down economics. During a tumultuous time for the economy and after Boris Johnson resigned over a series of scandals, the new prime minister said she plans to pursue a low-tax economy. Biden has argued that the economy should be built from the bottom up and middle out.
On the same day that Biden said he was sick and tired of trickle-down economics, Liz Truss promoted a proposal to boost banker bonuses.
Liz Truss wants world leaders to follow the UK's example.
All Rights Reserved © 2024
