On Wednesday’s broadcast of CNBC’s “Squawk Box,” former Biden White House National Economic Council Director Brian Deese reacted to projected cost overruns in the Inflation Reduction Act’s green provisions by stating that the prospect of a cost overrun is “overwhelmingly,” “very positive.” And “overall, the more economic response we can have in terms of durable private investment in potentially high-productivity areas of our economy, that’s a very good thing.”
Co-host Andrew Ross Sorkin asked, “How concerned are you, or do you say to yourself, this is going to be success, that the clean energy programs that have been put in place are being used — the uptake on those programs are being used at multiples — I think — most of the expectations of what people ever anticipated, in which case, there [are] going to be a lot more subsidies and a lot more things that had not been put into the — baked into the original cake. So, when we go look at these numbers, five, ten years from now, I don’t know, do you say, this is great success, and it looks more attractive, or are you going to say, actually, this cost us a small fortune and what did we get for it?”
Deese responded, “It’s a great question and it goes to the fundamental of the economic response we’ve seen. At core, this is about private sector investment. And that’s what’s unique about these three sets of bills is they’ve accomplished something that government policy doesn’t always accomplish, which is to provide enough long-term certainty that private capital is now putting itself at risk to build and scale in areas that they haven’t before. I think overwhelmingly, that is very positive. And the biggest risk we have to the segment before about workforce or permitting or otherwise is that we don’t follow through on the other necessary elements to actually allow that investment to happen and to provide the economic benefits. I think that’s the bigger risk. Of course, you want to pay attention to the fiscal side, but this goes to the structure of the Inflation Reduction Act, it had $2 of deficit reduction for every dollar of investment. So, even if you take the higher estimates, by the end of the decade, you’re still — just that bill alone is still generating $40, 50 billion in deficit reduction a year. So, you want to keep your eye on it. But overall, the more economic response we can have in terms of durable private investment in potentially high-productivity areas of our economy, that’s a very good thing.”
Deese’s comments come in the wake of electric bus company Proterra — which the Biden administration boosted — filing for bankruptcy.
Follow Ian Hanchett on Twitter @IanHanchett
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