Summers Favors Biden Keeping Economic Team in Place Post-Midterms
(Bloomberg) — Former Treasury Secretary Lawrence Summers favored President Joe Biden keeping his current economic team in place, with no need to change in the wake of the midterm congressional elections.
“They’ve very good people — I don’t think the people are the issue, it’s a very experienced team,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “Inevitably, over time administrations have turnover,” he added.
Summers last year took issue with the size of the Biden administration’s pandemic-relief package, and blasted economic officials’ prediction that a spike in inflation would prove “transitory.” But he also endorsed many of the tax-hike proposals from Biden’s team, along with elements of the infrastructure and clean-energy investment legislation it sought.
Before the Democrats outperformed the expectations of many political observers in Tuesday’s midterm election, speculation had centered on the potential for an overhaul of Biden’s economy team. Treasury Secretary Janet Yellen last month said “there is no truth” to suggestions that she plans to depart her post in the near future.
National Economic Council Director Brian Deese in late September also said he had no plans to leave.
Summers saw two focus points going forward: implementation of the economic packages enacted in 2022 and 2021, and a fresh effort to address long-run fiscal challenges, especially with the government’s debt-servicing costs rising.
“The administration has a real opportunity now to move to an implementation phase,” said Summers, a Harvard University professor and paid contributor to Bloomberg Television. He highlighted the need for deeper cooperation with the private sector to build out infrastructure in a way that helps reduce bottlenecks.
Mapping out investment in all kinds of energy, along with semiconductors, are among the priorities, Summers said.
He added that it’s “appropriate,” given the challenge with inflation, that there are no further proposals on the table for “three and a half trillion dollar new deals.”
“We are going to have to refocus, now that interest rates have become significantly elevated, on the country’s long-run fiscal picture,” Summers said. “There is real risk, without capital gains inflating tax revenues, with higher interest on the debt, that that could become again a substantial issue for the economy.”
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