US Treasury Secretary Janet Yellen attends an event on the Inflation Reduction Act after visiting the site of a new paperless processing initiative in McLean, Virginia, on August 2, 2023.
Stefani Reynolds | AFP | Getty Images
WASHINGTON — Treasury Secretary Janet Yellen on Monday said the Inflation Reduction Act, the 2022 law that spurred major investments in infrastructure, manufacturing and climate goals, has propelled the U.S. economic recovery.
“Over the past year, our task has been to transition the economy from rapid recovery to stable growth,” Yellen said. “Our path so far shows that we are on the right track, even as we remain vigilant about potential challenges and uncertainties.”
The Treasury chief touted the historic creation of over 13 million new jobs since President Joe Biden took office, recovery from record inflation and an unemployment rate comparable to the lowest in 54 years, as she spoke before the International Brotherhood of Electrical Workers 357 Training Center in Las Vegas.
She partly attributed the progress to “Bidenomics,” the term used to describe President Joe Biden’s economic growth strategy that includes the Bipartisan Infrastructure Law, the CHIPS and Science Act and the IRA, which was signed a year ago this week.
The term emerged on the political landscape in the past year, first used by Republicans to describe high inflation and the interest rate hikes that were meant to cure it.
But as economic indicators improved this spring on both fronts, Democrats saw an opening to flip the GOP attack line and embrace “Bidenomics,” much like former President Barack Obama did with Obamacare.
In her remarks Monday, Yellen touted steadying headline inflation numbers, which were up 3.2% in July from a year prior, compared to a 9.1% yoy peak in June 2022 and average hourly earnings growth as evidence that “workers are better off than they were last year.”
“The continued strength of our labor market is particularly impressive given our fight against inflation,” she said. “We know that progress rarely moves in a straight line. But I still believe that there is a path to continue reducing inflation while maintaining a healthy labor market.”
Yellen noted that U.S. companies have committed to more than $500 billion in manufacturing and clean energy investments since January 2021.
“The explosion in U.S. factory construction is a uniquely American story: one that we do not see replicated in other peer countries,” Yellen said.
Nearly 80 clean energy manufacturing facilities or expansions have been announced in the past year, an amount exceeding the prior eight years combined, per the American Clean Power Association. Dozens of companies have also declared plans to invest in manufacturing facilities in more than 20 states, according to Senate Democrats.
Despite the strong economic numbers, Republicans have continued to pressure the administration on the economy, with Rep. Jason Smith, R-Mo., pointing to continued high prices for goods and services following the July jobs report.
“‘Bidenomics’ fueled a spike in the price of everything from gas to groceries to homes, and fighting it with interest rates, by design, puts the brakes on the economy, including the job market,” the chairman of the House Ways and Means Committee said.
Brian Deese, former director of the National Economic Council under Biden, said last week that it is up to Democrats to sell the economic impact of the IRA to voters in the leadup to the 2024 election.