With the midterm elections just weeks away, Treasury Secretary Janet Yellen is hitting the road to highlight President Joe Biden’s economic agenda while reminding everyone about some of its unfinished business, including higher taxes on corporations and the wealthy.
In an appearance Thursday at Ford Motor’s Rouge Electric Vehicle Center in Dearborn, Michigan, Yellen played up the investments the Biden administration is making in things like semiconductors and green energy that will expand the productive capacity of the economy – an approach she referred to as “modern supply-side economics,” which is intended to foster both growth and fairness and which stands in stark contrast to the Republican emphasis on tax cuts and deregulation.
“In layman’s terms, this approach embraces the notion that some of the best opportunities for growth occur when we invest in people and places that have been forgotten and overlooked,” Yellen said. “We know that a disproportionate share of economic opportunity has been concentrated in major coastal cities. Investments from the Biden economic plan have already begun shifting this dynamic.”
Priorities for the administration in the next two years are drawn from elements of the president’s agenda that were jettisoned during negotiations over what became the Inflation Reduction Act, including free preschool and community college, workforce training, low-cost child care and affordable housing.
Yellen also said the administration plans to stabilize public finances once inflation has been brought under control. “This includes closing loopholes and returning tax rates for high earners and corporations to historical norms,” she said. “By making everyone pay their fair share, these reforms will provide our government with additional fiscal room to make critical investments.”
Still, the voters Yellen is trying to appeal to will need to accept the administration’s sunny take on the current state of the economy, which is still experiencing inflationary pressure and threatened by a potential recession induced by the Federal Reserve’s monetary tightening campaign. Nevertheless, Yellen said she thinks recent economic gains are substantial, and could pave the way for a new round of policy interventions.
“For all there is left to do, I will say this: after the progress we have made over the past few months, I am more optimistic about the course of our economy than I have been for quite a while,” she said.