Summers favors Biden keeping economic team after midterms

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(Bloomberg) – Former Treasury Secretary Lawrence Summers preferred President Joe Biden to keep his current economic team in place, with no need to change following the midterm congressional elections.

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« They’ve got some really good people — I don’t think people are the problem, they’re a very experienced team, » Summers told Bloomberg Television’s « Wall Street Week » with David Westin. « Inevitably, over time, administrations have turnover, » he added.

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Last year, Summers challenged the size of the Biden administration’s pandemic relief package and blasted economic officials’ prediction that a spike in inflation would prove « transient ». But he also endorsed many of Biden’s team’s tax hike proposals, as well as pieces of infrastructure and clean energy investment legislation they were seeking.

Before Democrats beat the expectations of many political watchers in Tuesday’s midterm elections, speculation had centered on the potential for an overhaul of Biden’s economic team. Treasury Secretary Janet Yellen said last month ‘there is no truth’ to suggestions she was considering quitting her post in the near future.

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At the end of September, the director of the National Economic Council, Brian Deese, also declared that he had no intention of leaving.

Summers saw two priorities going forward: the implementation of the economic packages enacted in 2022 and 2021, and a renewed effort to address long-term fiscal challenges, especially with rising debt servicing costs. of the government.

« The administration now has a real opportunity to move into an implementation phase, » said Summers, a Harvard University professor and paid contributor to Bloomberg Television. He stressed the need for deeper cooperation with the private sector to build infrastructure in a way that reduces bottlenecks.

Mapping investments in all kinds of energy, as well as semiconductors, is high on the agenda, Summers said.

He added that it was « appropriate », given the inflation challenge, that there were no other proposals on the table for « three and a half billion new deals ».

« We’re going to have to refocus, now that interest rates have gotten significantly high, on the long-term fiscal position of the country, » Summers said. « There is a real risk, without capital gains inflating tax revenues, with higher interest on debt, that this could become a substantial issue for the economy again. »