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Yellen Says Inflation Reduction Act, CHIPS Act Rescues US Economy


U.S. Treasury Secretary Janet Yellen toured the Ford Motor Company’s Rouge Electric Vehicle Center, where the all-electric Ford F-150 Lightning was built with Linda Zhang, (R), chief vehicle engineer, before an economic speech in Dearborn, Michigan, on September 8, 2022.

Jeff Kowalsky | AFP | beautiful pictures

Treasury Secretary Janet Yellen praised the Biden administration’s economic policies on Thursday in a speech at a Ford automobile company electric vehicle factory in Michigan.

Yellen, who spoke after a tour of the Rouge Tram Center in Dearborn, praised the Democratic-led Inflation Reduction Act, bipartisan infrastructure legislation and the Science and CHIPS Act as benefits. for manufacturing and job growth.

Her speech came as a Democrat aimed at highlighting their economic successes before the midterm elections in November, the election will decide whether Republicans can retake one or both houses of Congress. President Joe Biden will travel to Ohio on Friday to expedite the opening of an Intel semiconductor manufacturing facility.

Many government policies are consistent with Yellen’s so-called Modern Supply Side Economic framework. Before the pandemic, she said, higher inequality was accompanied by slower economic growth.

“And now with a full-employment economy, we are perfectly suited for supply-side expansion, delivering sustainable growth and reducing inequality,” says Yellen.

She also noted that the Biden administration’s stabilization efforts “will bring the United States back to full employment in record time” following the pandemic, reduced workforce participation, and the war in Ukraine. weigh on the US economy.

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“Taken together, the bipartisan infrastructure legislation, the Chips Act, and the Inflation Reduction Act are authorized among the most significant investments our country has ever made,” Yellen said. “I firmly believe they will help us achieve steady, sustainable growth and they will move us towards a more equitable and resilient economy.”

American rescue plan

Yellen cited economic change during the pandemic as one of President Joe Biden’s political priorities when he entered the White House.

“Because of our Rescue Plan and our vaccination campaign, the United States has experienced the fastest job creation in our history,” she said. “Household balance sheets are strong and businesses continue to invest.”

Biden signed $1.9 trillion pandemic relief package into law in March 2021, allowing payments of up to $1,400 for most Americans, a $300 per week extension for unemployment insurance, and an extension of the child tax credit. The package also includes $20 billion for Covid-19 vaccinations and millions of dollars in rental assistance.

The unemployment rate returns to pre-pandemic levels in July and tied for the lowest level since 1969 for every demographic except African Americans, according to data from the Bureau of Labor Statistics.

During his visit, the Secretary of the Treasury also visited small businesses that are recipients of Detroit’s Motor City Match program. An expansion of that program was made possible with $15 million in Rescue Plan funding.

Republicans have criticized Democrats for passing the legislation, saying massive government aid has helped fuel inflation.

Inflation Reduction Act

$80 billion allocated to the IRS under Inflation Reduction Act Enforced compliance with the 15% minimum tax rate for large corporations will help regulate the two-tier tax system, Yellen said, “by ensuring that large corporations and high earners cannot avoid pay the taxes they owe”.

The tax cap — the amount owed but not yet paid to the IRS — will amount to $7 trillion over the next decade and is “disproportionately concentrated among higher earners,” she said.

Resources from the IRA “will allow the IRS to increase scrutiny of taxpayers at the top and collect taxes from those who haven’t paid their bills in full,” Yellen said.

The GOP has also targeted tax increases as part of a bill that Democrats aim to use to pay for large investments in climate change mitigation.

CHIPS Act

The CHIPS ActA bipartisan bill backed by Biden, Yellen said, aimed at historic investments in domestic semiconductor manufacturing, would allow the US to compete economically with China and other countries that have invested more in research. and grow, Yellen said.

“The United States now ranks 10th in the world in terms of R&D investments in terms of total output,” she said. “Estimated cost [of] The retreat of public R&D is $200 billion per year in lost economic output. And in the meantime, rivals in China and the rest of the world are moving forward. “

Yellen said about $40 billion in incentives put into the chipmaking sector would reduce foreign dependence on the technology needed to make cars and other goods.

Investments of the Ministry of Commerce

Yellen said the modern supply-side policies promoted by the Commerce Department and the White House are pro-growth as well as pro-equity. The richest Americans and large corporations have benefited the most from tax incentives from previous administrations, she said. But the Biden administration has focused on investing in disadvantaged communities.

“In layman’s terms, this approach implies that some of the best opportunities for growth occur when we invest in people in places that have been forgotten and overlooked,” says Yellen.

The Treasury Secretary said the Commerce Department would establish at least 20 technology and innovation hubs “geographically dispersed, with priority given to underserved and under-represented communities.”

“The dispersion of economic opportunity across the country will mean good new jobs and industries,” Yellen said.



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