ICYMI: Secretary Yellen’s Interview on The 11th Hour with Stephanie Ruhle on the State of the U.S. Economy, Tariffs, and the Biden-Harris Administration's Domestic and International Economic Agenda

ICYMI: Secretary Yellen’s Interview on The 11th Hour with Stephanie Ruhle on the State of the U.S. Economy, Tariffs, and the Biden-Harris Administration's Domestic and International Economic Agenda

WASHINGTON – Yesterday, Secretary of the Treasury Janet L. Yellen joined Stephanie Ruhle on The 11th Hour on MSNBC to discuss the economic progress the United States has made over the past three and a half years, as well as the Biden-Harris Administration’s efforts to lower costs for American families and create economic opportunity across the country, including new, good-paying jobs for Americans without college degrees. Secretary Yellen also discussed the Biden-Harris Administration’s international economic agenda and the benefits it is creating for American firms, workers, and families. 

 

Watch the entire interview here.

MSNBC: Secretary Yellen's Interview with Stephanie Ruhle – The 11^th Hour with Stephanie Ruhle

October 17, 2024

FULL TRANSCRIPT

STEPHANIE RUHLE: Madame Secretary, thank you so much for your time. By most major measures, the economy is doing very well, yet most people in America, many people in America, still don't feel good about their personal finances. What do we do about that? How do we solve for it?

SECRETARY YELLEN: Well, I think the cost of living is very high. This has really been true for a long time, but the inflation that we saw after the pandemic really exacerbated it for so many people, but it's been building for a long time. The high cost of housing, of childcare, of healthcare, many middle-class families are just making it. Finding it very hard to make ends meet, and so it really is the top priority of the Biden Harris administration to find ways to bring down costs, and we've done that in health care, the cost of insulin for seniors has been capped. Health care premiums have been kept down. We're finding ways to let Medicare negotiate for drug prices, saves the government money, saves families a lot of money, energy. We're supporting the development of clean energy, which will make us much less subject to the ups and downs of global markets when a dictator like Putin invades Ukraine and causes oil prices to spike as we become more reliant on renewables, and that will be spurred by the trillions of what hundreds of billions of dollars of investment that have been stimulated by the Inflation Reduction Act, the tax incentives there. This will bring down energy prices for Americans, and housing. The President is proposed building 2 million additional homes and supporting first time homebuyers.

RUHLE: But that's just a proposal. When you look back on the four years, given what a massive pain point housing is for the American people, is that an area that you wish more action would have been taken sooner, because that seems to be an issue, that the proposal to build more housing is a great proposal, but it doesn't help anybody today.

YELLEN: Well, it will take a while to solve this. It does require, I think, increasing the supply of housing. So I'm sorry that Congress hasn't acted on proposals that the President made early on. Of course, higher interest rates have also raised mortgage rates, and house prices went up during the pandemic. And so for first time homebuyers, it's a it's a difficult time, but over time, it's important to address this, and the administration is focused on doing that.

RUHLE: Tariff seems to be the hottest word right now. Both parties use tariffs in different ways. Former President Trump has an idea for sort of these sweeping tariffs across the board, and many people, including you, have said how damaging that would be to our economy. But this idea of isolationism is sort of gaining momentum in this country, not just America first, but America could go at it alone. What would it do to our economy and our economic growth if isolationism became more widely accepted?

YELLEN: So I think the idea of isolationism as an approach to our relations with the world is highly misguided and would be very dangerous and would be very harmful to Americans. The proposals that we've heard for broad based tariffs, a group of economists recently weighed in that they overwhelmingly thought that this would harm economic growth and it would raise inflation, put face consumers with higher prices for a broad range of goods that we buy on buy that we don't even make in America, toys and other manufactured goods of that sort, and it would raise the costs for all of the producers that are reliant on inputs from abroad that would be subject to tariffs.

RUHLE: And why do you think so many people are sort of into this idea, like, yeah, tariffs, let's go with this. I mean, what you just laid out is exactly how tariffs work. I mean, I'm not saying it's econ 101, but it's, it's broadly understood, given that, why is this idea more tariffs? Why do people like it?

YELLEN: You know, we've seen, over decades, a loss of good manufacturing jobs in the United States, the real incomes of individuals who don't have a high school education as a consequence of globalization, particularly China's admission to The World Trade Organization around in the early 2000s and technical change that helped skilled workers and harmed less skilled workers have really resulted in job losses that are serious and wage stagnation for lots of people in America who don't have a college education, and this is something that's critical to address. President Biden has addressed it. It's central to his thinking about what to do over the medium term. And the trifecta of legislation, the Inflation Reduction Act, the Infrastructure Act, the Chips and Science Act, Semiconductors Act are really designed to support strategic areas that will create good jobs all over the country, especially for people who don't have a college education, and are strategic and important for our future. But this is not at the expense of trade. This is not close off America and make everything at home. Trade also brings tremendous benefits. Millions and millions of jobs are dependent on our exports to the rest of the world, foreign direct investment in the United States supports millions of jobs. Trade is important, and we can't be totally self-reliant. So, we've pursued an approach to trade I call friendshoring. So, we don't want to be overly dependent, totally dependent on any one country for our supplies of critical goods. We saw in the pandemic how dangerous that is, how we can find ourselves unable to get things like semiconductors or PPE, but we don't want to do everything ourselves, and our administration has tried to support greater trade to make our supply chains more resilient with The many countries that we feel are our friends, that we can trust, and that we want to enhance our engagement with countries in Latin America, India, Vietnam, many places around the world.

RUHLE: When we talk about bringing back or creating strategic manufacturing, do we need to be more honest With the American people about what that looks like, because people can tell them, we're bringing manufacturing back. Manufacturing will be the solution. But the truth is, in the 1940s manufacturing jobs were 40% of the jobs in this country. Now it's less than 10% we're never really getting back to 40% so do we need to be more honest about what bringing back manufacturing looks like, because when we keep talking about bringing back, we can end up just giving lots of people more false hope when they've lost hope over the last few years.

YELLEN: We're increasingly a service economy, and we do need to be realistic about that, but we can have a vital manufacturing sector. Manufacturing does create good jobs with career ladders, and we’re seeing as a result of this legislation, these job openings being created all over the country, and particularly in parts of the country that suffered because of this China shock, because of globalization. Battery factories opening in the Midwest, clean energy. I've been all over the country visiting training programs where high school students are acquiring the skill to work, whether it's in a clean semiconductor manufacturing or I was in North Carolina at the biggest American firm making lithium hydroxide in their operations. Since the IRA passed, they've doubled, and they're hiring lots of lots of workers. So, I wouldn't want to exaggerate how important manufacturing jobs will be overall in the economy, but these are good jobs in sectors that are critical to our future, where we want to have a presence. These are jobs where or industries where there's a lot of technological change, being there can raise productivity, expand our economy, bring down costs over time in ways that will be beneficial for Americans so, but I don't want to exaggerate how important they will be.

RUHLE: You've also been to China many times, and there's tons of questions and skepticism and criticism of China's trade policies and practices that make it unfair for US businesses. Is there anything we should start doing now so we can become more economically competitive with China.

YELLEN: Well, the pieces of legislation I referred to are the critical things that we need to become more competitive. We have we are investing heavily in semiconductor manufacturing, in clean energy and electric vehicles, and of course, we're restoring our infrastructure, and these are critical things to be more competitive, but we're very concerned about China's unfair trade practices in some of these sectors, where We want to have a presence in the United States. I'm not saying that we want to be the only producer of these goods in the global economy, but we want resilient supply chains, and we want some domestic presence. And in addition to creating tax incentives that are having a dramatic effect in boosting private investment in all of these sectors. We've seen hundreds of billions of dollars of investment in these sectors, but for a time, we need to protect these industries from China's unfair trade practices. So, we talked about the harms for a broad-based program of tariffs, but we've put in place a narrow, carefully targeted set of tariffs in sectors that are strategic, that we've made a conscious decision to promote in the United States. So, we the Biden administration recently announced tariffs on this is $18 billion worth of imports from China. It is narrow and targeted, but there are areas that we feel we want to invest in and have a presence.

RUHLE: One thing we have in this country in huge supply or huge numbers. We have massive deficits in this country. And it doesn't matter who the next President is going to be, when you look at both of their proposals, the debt is only going to grow. Have we stopped caring about debt deficits in this country, because it doesn't seem like we're doing anything to address it.

YELLEN: Well, the Biden administration has not stopped caring about it, and we are trying to do things about it. We signed a deal that was passed through Congress when we raised the debt ceiling that reduces 10-year deficits by just over a trillion dollars, and President Biden proposed a budget that contains an additional $3 trillion of deficit reduction over the next decade. And the way in which that's accomplished is partly by boosting revenues which have fallen below historically normal levels. And what we're asking in the tax proposals in that budget are for wealthy individuals and corporations to pay their fair share.

RUHLE: So, what do you think should happen next year when the Trump tax cuts expire?

YELLEN: President Biden has proposed continuing the tax cuts for individuals making under $400,000 and expanding the child tax credit, and he would propose paying for those finding additional tax, tax increases or spending cuts or savings above and beyond what the 3 trillion that we proposed to pay to pay for that. What we would oppose are simply extending all of the tax cuts that mainly benefit wealthy individuals and corporations, and not paying for it. The CBO has said that would raise deficits by $5 trillion over 10 years.

RUHLE: A number you have in your mind when you think about getting companies, getting corporations, to pay the right amount of taxes, right? It's a fine line, because you want them to pay more, but not so much more that they're going to leave the US. Is there a number in your mind?

YELLEN: We proposed a 28% tax, corporate tax rate and other kinds of loophole closures, including raising the tax rates on the income of U.S. multinationals that are earning income abroad, which we should do as part of 137 country tax agreement that we negotiated. Other countries are now raising their minimum taxes on their multinationals to 15% and we think that we should do that as well. So those are some of the things that we would propose to raise the revenues. And I do think the metric that we look at most carefully in assessing the sustainability of our fiscal path is net real interest on the federal outstanding federal debt. Historically, that has been under 2% and we've tried to put forward a budget that would hold it certainly below that level and stabilize it and I would say that that's what a responsible budget would look like.

RUHLE: I know I'm out of time, but I just want to ask you personally, because I've had the privilege of interviewing you now four times, and we're here in New York City. We are not far from where you grew up when you were a girl in Bay Ridge, Brooklyn did you ever think this would be your life today? You embody the American dream.

YELLEN: Thank you. I feel immensely privileged to have had the opportunities that I've had.

RUHLE: When you were a high school girl, what did you want to do? What did you see your life would look like?

YELLEN: Well, I went to a high school called Fort Hamilton, and it was named after Alexander Hamilton, but I never anticipated that I would hold the same job that he held all these years later, but I feel like I had a very good education in public schools in New York, and I feel immensely privileged to have had these opportunities to serve.

RUHLE: Well, it was a privilege to get to have this time with you. Thank you so much.

YELLEN: Thank you so much. Thank you, Stephanie.

RUHLE: My pleasure. Thank you.

[End of transcript]

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