WH Econ. Adviser on Spending as Fed Tries to Lower Demand: We Need to Focus on Clean Energy

On Monday’s broadcast of CNBC’s “Squawk Box,” White House Council of Economic Advisers member Heather Boushey responded to a question on whether the federal government should keep spending even as the Fed is trying to reduce inflation by stating that “we need to make sure that we are focused on this transition to clean energy for the sake of the environment, but also to make sure that we have that energy independence.”

Co-host Joe Kernen asked, “Would you continue to try to effect some of the president’s priorities knowing that it was counter to what the Fed is doing? Would you continue to have demand increase by spending on whatever, on whatever social programs you want to spend on, or at this point, do you think we really need to take a pause, let the Fed affect demand so [inflation comes] down? Should we keep spending, got more to do next year?”

Boushey responded, “Well, here’s the thing, there have been a series of historic investments that are now going into the economy. The last — this congressional session has been historic in terms of the amount of legislation that’s gotten through, much of which on a bipartisan basis, and much of which has been focused on addressing core challenges on the supply side of the economy. We all saw, over the course of the pandemic, how fragile America’s supply chains are, and we’ve seen, of course, it’s brought into stark relief, especially since Putin’s unprovoked war in the Ukraine, how we need to make sure that we are focused on this transition to clean energy for the sake of the environment, but also to make sure that we have that energy independence. And so, the president’s focus…on semiconductors, but clean energy, on making and building things here in America, those are the kinds of investments that we need to continue to make to support the economy nationwide, but these are supply-side investments that are going to make our economy more productive, more resilient, more competitive internationally over time.”

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