Jared Bernstein: Biden Clear on His 'Red Lines' on Infrastructure Deal ("Squawk Box"/CNBC)
By Sandy Fitzgerald | Monday, 21 June 2021 03:03 PM
President Joe Biden "couldn't have been more clear" about his two red lines when it comes to reaching a deal on infrastructure spending, including the one for roughly $1 trillion from a bipartisan group of senators, Jared Bernstein, a member of the president's Council of Economic Advisers, said Monday.
"One is that inaction is unacceptable," Bernstein said on CNBC's "Squawk Box." "(We) have talked about the need for investments in infrastructure, in R&D (research and development), electric vehicles, in clean energy for years now and this president deeply values and understands the importance to our economy, to our productivity of those investments."
Biden's "other line in the sand" is that there be no tax increases of any kind for anyone earning less than $400,000 a year, said Bernstein.
"Both sides now say they want to make sure this agreement has some 'pay-fors' and that is still clearly under negotiation," he added.
Meanwhile, with the negotiations still going on, there has been some evidence that Biden will want to push forward without a bipartisan agreement, and there has been evidence of that with the negotiations with Republicans led by Sen. Shelley Moore Capito, R-W. Va., said Bernstein.
"The negotiations just weren't headed towards a number that was acceptable to this president," he said. "Now we have a set of paths that we've been talking about the bipartisan group in the senate but there are numerous other initiatives afoot here."
Bernstein also discussed the prospect of inflation, saying the recovery plan has achieved what Biden intended it to do in terms of getting vaccines in arms and getting American families and businesses on the other side of the pandemic.
"Look at the forecast for the GDP," he said. "The forecast for getting back to full employment to a 50 year low in the unemployment rate is faster than anyone expected."
He added that the Fed's story on inflation "matches very much that of most forecasters, including ourselves, which is one of a lower inflation rate in '22 versus '21. This is unfolding much as myself and my colleague Ernie Tedeschi explained in a blog a month ago. we see this occurring much in the way we described."