Biden’s 2023 budget investments needed in the face of inflation, says Janet Yellen

Janet Yellen in front of the Senate Finance Committee in Washington, June 7, 2022 (Nicholas Kamm / AFP)

The investments planned by US President Joe Biden in his 2023 draft budget, in particular to develop renewable energies, are necessary to fight inflation, US Treasury Secretary Janet Yellen said on Tuesday in front of senators.

“Elements of the President’s bill — including clean energy initiatives and plans to reform the prescription drug market — can help reduce the costs paid by U.S. consumers,” the Secretary of the Economy said. of Joe Biden, before the Senate Finance Committee.

Joe Biden is counting in particular, to reduce the electricity bills of American households, on investments intended for the development of renewable sources of electricity. He also wants to reduce the cost of prescription drugs.

Pleading with these senators to adopt the president’s 2023 budget proposal, Ms. Yellen assured that an “appropriate fiscal stance is necessary” in the United States to control inflation without weakening the labor market, “by complementary to the monetary policy actions of the Federal Reserve”.

The elected members of Congress – senators and elected members of the House of Representatives – hold the purse strings and will have to vote on the draft 2023 budget, which was presented at the end of March by the American president.

“Congress has many levers to ease the burden of costs on households,” said the minister.

Inflation will ‘stay high’

Joe Biden has made fighting inflation his economic priority. The rise in prices slowed down a little in April, after having reached 40-year highs in March, but remains very high, at 8.3% over one year according to the CPI index – on which pensions are indexed, in particular. .

Inflation in May will be published on Friday and should, over one month, accelerate again, according to a consensus of analysts.

The Treasury Secretary warned that inflation should “stay high”, without specifying a deadline.

Last week, it admitted that it had not foreseen the strength of this price surge in 2021, and underlined on Tuesday that it had not anticipated “a scenario in which we would be faced with multiple variants of Covid (which ) would disrupt our economy and the global supply chain,” or “the impact on food and energy prices of the Russian invasion of Ukraine.”

She added that she and US central bank chairman Jerome Powell at the time “could have used a better term than transitional”, an adjective by which they, for several months, described inflation.

Janet Yellen will be heard on Wednesday by members of the committee responsible for tax issues in the House of Representatives, on the same subject.

On March 28, the American president presented a draft 2023 budget – from October 1, 2022 to September 30, 2023 – of nearly 5.8 trillion dollars. This project prioritizes taxation of the wealthiest Americans, crime control, and defense to support Ukraine in the face of Russian invasion.

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