Geoff: Good evening.
We're learning more this week
about the strength of the
U.S. Economy and whether high
inflation and rising interest
rates are pushing it into a
recession.
Amna: Tomorrow, the federal
reserve is expected to raise
interest rates by another
quarter of a point.
On Friday, the next labor report
will show whether job growth is
slowing even further.
And the showdown over the debt
ceiling, and the threat of a
default this summer, is hardly
over.
All of that may add to the sense
that the economy is on the
knife's edge.
But a recession is not a given.
In fact, yesterday the
international monetary fund
revised its forecast and said it
does not anticipate a global
recession.
Brian Deese is one of the
president's key advisers on all
of this.
He's the director of the
national economic council.
He joins us now.
Welcome back.
Let's begin with the debt
ceiling debate.
Tomorrow, president Biden will
meet with us become Mccarthy.
The white house has made clear
the president will release his
budget in early March.
We heard president call for the
speaker to do the same.
In your conversations, do you
have any sense of what Mr.
Mccarthy is asking for?
Where do Republicans want to see
spending cuts?
Brian: This is precisely the
reason the president has put
emphasis on the need for speaker
carthy and house Republicans to
release a budget, release those
details, and show they have a
pathway to pass a budget with
218 votes in the house.
That is important to having a
serious conversation about
priorities.
The recent data we've seen on
the economy has been quite
promising.
Solid economic growth.
One of the strongest labor
markets in recent history, the
lowest unemployment rate in 50
years and inflation is coming
down.
It has fallen the last seven
months, consumers have seen at
the gas pump, price increases
are slowing at the grocery store
and we have seen it in other
parts of the economy.
We know what we need to do, keep
focusing on reducing prices for
consumers, investing in the
United States, the old and more
industrial capacity and
manufacturing capacity across
the United States.
We have all of these goals
within our waste and -- our
reach and the last thing we need
is a self inflicted wound.
Amna: The white house has made
clear that raising the debt
ceiling is not a negotiation.
Why the meeting?
What does president Biden hope
to get from that face-to-face
meeting with speaker Mccarthy?
Brian: Honoring the full faith
of the United States, the
obligations we have already
made, should not be a negotiable
item.
It has not been for prior
presidents of both political
parties.
The leaders in the senate and
house of both parties today have
made clear that this should not
be a question.
We should not put the full faith
and credit of the United States
at question.
But we can have a serious
conversation about economic and
fiscal priorities and do that as
part of the normal budget
process and that's what the
president is going to focus on.
He will release his budget, it
will be a detailed blueprint of
how he would recommend investing
in the country, continuing to
make progress on our economic
recovery, and bringing down the
deficit at the same time.
He has a set of proposals, he's
happy to look at the proposals
when house Republicans put out
there detailed plan.
We should have that conversation
as part of the normal budget
process.
We should not use the threat of
default in a way we have never
done as a country as a way, as a
bargaining chip or hostagetaking
for particular proposals.
Nobody should be doing that.
Amna: Let me ask you about where
the economy is right now.
Unemployment is at a 50 year
low.
Inflation remains a concern and
consumer spending has slowed
somewhat.
That leads some economists to be
worried.
The national association of
business economics surveyed
economist and more than half of
them said they believe there is
more than a 50-50 chance the
U.S. Enters a recession this
year.
Do you agree?
Brian: Let's step back.
About six month ago the
president came out and said what
we need to see is a transition
to more steady and stable growth
where we have resilience in the
labor market and we bring
inflation down.
A lot of people were projecting
that was impossible and we might
see the economy slow down and
slide into recession.
Six most later, we have seen the
labor market has remained
resilient, and the unemployment
rate continues at a historic
low.
Inflation has come down for the
last six months.
We are making progress on that
front.
We can continue to make progress
because we have seen it over the
last six months, the last three
months as well.
We've got to keep that progress
going, but that is where
priorities matter.
The president's focus now is
implement some of the historic
legislation passed last year
that will bring further price
declines for Americans on health
care, prescription drugs, clean
energy -- these are in the
pipeline and can help people and
their pocketbooks in the months
ahead.
Amna: If I may, I apologize,
consumer spending is a huge part
of the economy, 70%.
That slowdown worries a lot of
people and a lot of things
fueling the resilience were
things like people getting out
after covid lockdowns and
spending a lot of money.
And federal pandemic funds.
Those are gone and the costs of
borrowing are up and people have
less savings now than before.
On consumer spending in
particular, where do you see
evidence that will go back up?
Brian: Look at what happened in
the fourth quarter this past
year.
We just got the data on it.
We saw solid economic growth,
2.9%, driven by solid consumer
spending as well.
We are seeing some slowing and
you would expect that in some
areas.
If you look at household balance
sheets, many of the members of
basic economic security are
better than before the pandemic.
Credit card to liquid sees,
personal bankruptcies, home
mortgage delinquencies are lower
than before the pandemic.
That reflects the fact that this
has been a historically
equitable recovery.
There are risks on the horizon
and certainly we take nothing
for granted, what if you look at
what happened in the fourth
quarter of this year, I think
there is reason for cautious
optimism and certainly for
staying the course, that we need
to keep doing what we know is
important -- lowering costs for
families balance sheets and
encourage company to invest more
in America, create the kind of
jobs that give people
opportunities.
Amna: When it comes to that
optimism, the numbers show that
Americans don't quite share it
with you.
When you look at the latest
poll, people asked about the
economy and the president's
handling, 36% approve, 61%
disapprove, essentially the same
as a year ago.
Why do you think that is?
Brian: It has been a difficult
set of years and consumers are
still facing challenges coming
out of the pandemic and
certainly inflation has been a
frustration for folks.
I think the good news for
Americans watching at home is we
are making real progress in
inflation coming down.
Gas prices are down about $1.50
since the summer, food inflation
is coming down, and prices of
everyday goods and items that
seemed out of whack because of
some of the pandemic supply
chain issues, they are coming
back.
Ultimately, the ultimate outcome
of the president's economic
strategy will be across time,
are we building a stronger, more
resilient economy for the
future?
I think the answer is yes.
We will keep our head down and
focus on those things we know
matter to American families,
first and foremost is continuing
to reduce the costs families
face.
Amna: Brian Deese, always great
to talk to you, thank you for
your time.