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U.S. economic recovery has made ‘historic progress,’ White House NEC director says

White House NEC Director Brain Deese joins Yahoo Finance Live to discuss President Biden's agenda and the outlook for the U.S. economy, supply chain disruptions, and the labor market.

Video transcript

JOE BIDEN: The Federal Reserve provided extraordinary support during the crisis for the previous year and a half. Given the strength of our economy and the pace of recent price increases, it's appropriate, as the Fed Chairman, Chairman Powell, the Fed Chairman Powell has indicated to recalibrate the support that is now necessary.

- That was President Biden speaking at a press conference yesterday, highlighting the Federal Reserve's mandate of price stability. Now by all accounts, the president has overseen a strong economy. In his first year in office, 6.4 million jobs created, unemployment down, wages are up. And yet, inflation at near 40-year highs have continued to plague the White House. We had a chance to speak with White House National Economic Council Director Brian Deese earlier today and asked him how the administration plans to tackle that problem of price pressures. Take a listen.

BRIAN DEESE: Well, I think looking back with context, 2021 was a historic economic year-- the strongest job growth on record, the largest decline in unemployment in our nation's history, and the strongest economic growth in nearly four decades. In addition, we saw a 40% reduction in child poverty, a reduction in hunger, and an improvement in households' balance sheets. That is unique to America. We're only seeing that happen in the US.

And so we think that if you're looking back, we've seen really historic progress. And at the same time, we have challenges and work yet unfinished. The elevated price increases we've seen are clearly an issue. And what the president spoke directly to yesterday was the appropriate role for the Federal Reserve to play in dialing back some of the historic support it has been providing to the economy and the role that he can play in trying to help boost the productive capacity of our economy so we can move more goods and services through our economy more cheaply and build on this historic progress that we've made.

ADAM SHAPIRO: Hey, Brian. It was Will Rogers who said, "I'm not a member of any organized political party. I'm a Democrat." And I quote that from the last century because these days when we talk about, for instance, Build Back Better-- and you've just highlighted the accomplishments of the first year, which include the $1.9 trillion relief from the pandemic, the infrastructure bill. How do you get the Democrats, who are-- you have one part of the party saying, all or nothing. You have two senators who are saying, we're not going to amend in any way a filibuster. How does the president build cohesion, even if you're going to break out parts of Build Back Better, to get that through both houses?

BRIAN DEESE: Well, I think we do it by taking the approach the president outlined yesterday, which is identifying all of the areas where we can get support, build them together, get that done, and then keep working where we don't have it. And the good news is that broadly, across Democrats and the American people, there is broad support for taking steps that will help address the costs that families are facing on prescription drugs, on healthcare, on childcare, on reducing energy prices by investing in clean energy. In all of those areas, there is broad support.

And to Will Roger's point, I think the more striking contrast here is all of those areas are areas where Democrats agree, and the American people agree. They're common sense. They would reduce costs. And we don't see any Republicans supporting that. And frankly, we don't see the Republicans supporting any real concrete plan to deal with the price increases that we're facing.

So that's the way we're going to approach this, and the president has long experience in bringing coalitions together. It is never easy. It is never quick and immediate. That was not the path that we took in getting a historic, bipartisan infrastructure deal done last year, but that's the path we're going to keep at here, and we're confident we're going to get something done.

- With that said, Brian, there seems to be an increasing concession here that this large package-- roughly $2 trillion-- is not going to be able to pass in its complete form. We heard the president yesterday talking about potentially breaking up the pieces. Is the climate bill the priority right now? The roughly $500 billion-- if you don't have the support for the child tax credit, free community colleges, is the priority for the White House right now to move forward with at least a big chunk of this bill so you have something to take to the voters and say, look, we got this done?

BRIAN DEESE: Well, the president made very clear-- his priority is identifying all of the areas where we can find agreement, getting that done, and then continuing to work where we don't yet have agreement. And so that's exactly what we're going to do. And the need for investing in clean energy, having a more resilient energy system here in the United States that produces cheaper, zero-carbon energy here in the United States is a priority. Lowering the cost of childcare and healthcare and prescription drugs is a priority. These issues are hard, but we think we can get agreement on those.

And even on issues like the child tax credit, the president made clear that's going to be tough. But he also made clear he really prioritizes it because what it does is, it puts money directly in the hands of American families who are dealing with costs right now and empowers them by giving them a tax cut. So we're going to-- wherever we can get agreement, we're going to put this together, and we're going to try to get it done.

ADAM SHAPIRO: There are possibilities with Senator Manchin, who suggested a deal on climate provisions. What would that look like? Hypothetically, you and the president are in the Oval Office having a discussion with the senator. What's that look like? How do you get him to say yes to something, as you break it out of the bigger package?

BRIAN DEESE: Well, Senator Manchin is a partner, and one of the things that we're not going to do is to try to negotiate this out in public or characterize those conversations. It's important that we maintain those lines of communications and we do so respectfully and privately. But what I can tell you is that the core focus is on, what are the impacts of these provisions on the lives and livelihoods of the American people, and how are they responsive to the current economic challenges that we face?

So investments in clean energy, providing long-term incentives to the market in a technology-neutral way that will drive America to be a leader in generating the new clean energy technologies of the future, whether that be wind and solar or nuclear and carbon capture and sequestration-- that is a big economic priority and a big win for our economy and our workers, if we can get that right. We have an opportunity to do so in this package with provisions that we've spent a lot of time working with industry and with other stakeholders to get right. So that's a place where I think we can make a lot of progress.

- Let's talk about where things stand in the pandemic because it feels like there's been a bit of a shift in tone from the president to-- one year ago when he said we're going to beat this virus, to today where he's saying we're going to learn to live with the virus. If you look at this from the economic picture, I mean, the supply shortages, price pressures-- that's all come along with this. So to what extent can all that be controlled when you've still got the virus sort of looming in the background?

BRIAN DEESE: Well, this is a pandemic-driven crisis, and this recovery is marked by the intersection between the pandemic and the economy. No doubt about it. But you also heard the president loud and clear yesterday, saying, he does not accept the idea that the current normal is what we are going to live with. And in fact, we are making progress toward an outcome where COVID is not affecting everybody's daily lives and constraining our economy in fundamental ways. And we're making real progress toward that goal. We're not there yet, but we're making real progress.

And as we progress on the virus, it helps progress on the economy as well. That's been true when we came into office. It was true last month. It'll be true next month as well. But that's why you see the president focusing on things like our supply chains. We're working with business and labor to try to open up our ports, open up our railways and our trucking lines to move more goods through this economy. That's really important to do, and it's important to do in a way that helps minimize the impact of the virus and maximize the ability to move goods and services through this economy.

I'll say, today we're releasing a dashboard that shows that the number of containers that are sitting on docks for a long period of time is down 60% since November, even during the high holiday shopping season. That was because of hard work by port operators and companies across the private sector supply chain and our administration working in partnership with them, and that's the kind of thing we're going to keep at going forward.

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