Background Press Call by Chief of Staff Jeff Zients, National Economic Adviser Lael Brainard, and White House Officials to Preview the President’s Remarks at the Economic Club of Washington, D.C.
Via Teleconference
4:19 P.M. EDT
MR. EDWARDS: Hello. My name is Jeremy Edwards of the White House Press Office, and thank you for joining us today.
Soon, you’re going to hear from Chief of Staff Jeff Zients and National Economic Adviser Lael Brainard to preview the president’s remarks tomorrow at the Economic Club of Washington, D.C., where he will discuss the important moment we’ve reached where inflation and interest rates are falling while the economy remains strong.
Opening remarks from the two speakers I just mentioned will be on the record, and then we will switch to a background Q&A, during which those remarks — during the Q&A section — will be attributable to “White House officials.”
As a reminder, this call, the remarks, and any other materials will be embargoed until tomorrow, September 19th, at 5:00 a.m. That’s, again, this call is embargoed until tomorrow at 5:00 a.m. on September 19th.
With that, I’m going to kick it over to Chief of Staff Jeff Zients.
MR. ZIENTS: Hey. Hi, everybody.
Tomorrow, as — as Jeremy said, at the Economic Club, President Biden is going to speak to a new milestone: Inflation and interest rates are falling. At the same time, employment, wages, and GDP are rising.
I want to be really clear. This is not meant to be a declaration of victory. It’s meant to be a declaration of progress — significant progress. The president believes it’s important to mark this moment for the country by laying out how far we’ve come, while also outlining the work we still have to do.
From day one of this administration, there’s been three pillars to the president’s economic playbook.
First, the president delivered a historic response to a historic crisis. When we came into office, we faced a once-in-a-generation pandemic and an unprecedented shutdown of the economy, and there really was no plan or path forward.
In less than two months, the president devised and led a strategy and negotiated the most significant recovery package in decades, the American Rescue Plan, which delivered shots in arms, provided direct payments to families and businesses, prevented a wave of evictions, and revved up job creation.
Second, the president acted quickly to address global inflation. As inflation increased around the world, caused by the pandemic, primarily; broken supply chains; and Russia’s war against Ukraine, President Biden took on the roots of the challenge. He worked with the private sector to untangle snarled supply chains, getting goods back on shelves again. The president coordinated with allies and partners to address food and energy prices as a result of Putin’s decision to invade Ukraine, including historic releases of oil reserves to stabilize global energy markets.
The president has always respected the Federal Reserve’s independence to bring down inflation. That’s in stark contrast to his predecessor. And, you know, bottom line, this was a time that many economists predicted a recession was necessary to bring down inflation. And I think that the approach has proved them wrong, with a record 16 million jobs created, historic job creation for Black and brown workers, and workers receiving higher paychecks now than they did pre-pan- — -pandemic.
Third, the president has really led and written a new economic playbook for the country that invests in all of America — all parts of America, red and blue — and all Americans. And that’s going to have an impact for decades to come. The central piece here is to export American products, not American jobs, and to create good-paying jobs right here at home. So, he — the president threw out the old economic playbook of exporting American jobs, importing foreign products.
And in less than four years, the president has led — working with Congress — legislation to be passed that has resulted in the biggest bipartisan investment in infrastructure ever — investing in our roads, bridges, ports, trains, and so much else; the largest climate investment in history, creating American jobs, driving clean energy — really a clean energy revolution across the country, with America leading the world in clean energy; tens of billions of dollars to build new chip factories, reversing America’s decades-long reliance on foreign countries for chips manufacturing; and after a half century of failed attempts, negotiating with Medicare to lower prescription drug bills and capping insulin at $35 per month and prescription drug costs at $2,000 per year for seniors.
So, in closing, I want to talk about the work ahead. The president knows this is no time for a victory lap, which is why he will talk about the work ahead.
Every single day, the president and vice president push on what more can be done to make the economy stronger, create more jobs, and, importantly, lower costs. The president will lay out how we build on the progress that we’ve made across these three and a half years and what’s at stake as we move into this new phase in the economy.
As I said, the president and vice president want to lower housing costs, grocery prices, and make childcare more affordable. So, again, focused on lowering costs.
The president and vice president want to keep investing in all of America and all Americans in communities left behind, from Milwaukee to Scranton, from red cities and states to blue cities and states across the country.
The president and vice president want to keep America the safest and most secure nation to invest, maintaining rule of law in our democracy. We all know and business people know, and other leaders across the country, that our economic dynamism depends on it and makes us the envy of the world. So, I think it’s really important, but some of us can take for advantage — take for granted, at times, that maintaining who we are, rule of law, and democracy make America the envy of the world and where people want to invest.
So, make sure you tune in tomorrow afternoon — early afternoon to hear the president speak to this in more detail.
And with that, I will turn it over to Lael.
Lael.
MS. BRAINARD: Well, thank you, Jeff. And thanks to all of you for joining us this afternoon.
The president’s speech marks an important milestone. Today’s actions send a clear signal that inflation has come back down, interest rates are coming down, and the focus now is on sustaining the important gains on employment and income.
Inflation has fallen 95 percent of the way back to target, and it is now at the same level as the month before the pandemic began. Now interest rates are following inflation down as well, lowering costs for American consumers.
Americans have been through a lot, and the declines in interest rates and in inflation will provide relief by making things more affordable, from refinancing a home to buying a car. The price of gasoline has fallen close to $3 a gallon, below $3 in many states, and is at the lowest level we’ve seen in nearly three years.
Prices are down over the last several years for purchases like cars and appliances and electronics. Food prices are down over the last year in areas like potatoes and chicken breasts, and grocery prices overall are barely growing.
Wages are higher than they were before the pandemic after accounting for inflation, so working families have more purchasing power.
Now mortgage rates are moving down. The mortgage rate reductions we’ve already seen will save the average new home buyer $5,000 a year, and those savings will increase as mortgage rates come down further.
In addition, refinancing applications are at their highest level in two years, which will help provide relief for existing home borrowers. For the average new car buyer, a one percentage point decline in the interest rate will save up to nearly $1,100 on the life of the loan.
The president will note this hard-won progress but emphasize that we must continue to work together to tackle long-standing affordability challenges for middle-class families.
America needs more housing. That’s why it’s critical to move forward on ambitious plans to bi- — to bring housing costs down by building millions of new, affordable homes and providing incentives for states and localities to remove outdated obstacles to building.
It’s essential we continue to enable more workers to participate in the labor force and to make it easier and more affordable to raise a family.
Investing in children improves both their well-being and their future employment opportunities. And supporting childcare expands access to better employment opportunities for parents of young children. That’s why it’s critical to move forward on expanding the Child Tax Credit and ensuring childcare is affordable and accessible.
We have the highest employment rates for working-age people in decades and the highest on record for women. We’ve seen continued strong growth, with our economy growing faster than our comparable countries, and it’s even higher than forecasts from before the pandemic.
The declines in inflation and interest rates are welcome, but no one is declaring victory. The focus now has to be on sustaining the gains we’ve seen for middle-class families, workers, and small businesses, while continuing to address those long-standing affordability challenges in areas such as housing, health care, and raising children.
Let me hand it back to Jeremy.
MR. EDWARDS: Thank you, Lael.
With that, we’re going to switch over to our background portion of the call for Q&A.
Please use the “raise hand” function if you have a question. We’re going to have about 15 minutes here, so we’ll try to move through the queue as quickly as possible.
As a reminder, while those opening remarks from Chief of Staff Zients and NEC Director Lael Brainard were on the record, this portion will be on background attributable to “White House officials.”
So, I’ll let the queue fill up for a second, and then we’ll call on folks, and we will get underway.
And, again, as a reminder, the background call, including this section of the call, is going to be on embargo until tomorrow at 5:00 a.m.
All right. We will take our first question from Rob Wile at NBC News.
Rob, you should be able to unmute yourself now.
Q Thanks, all. I’m wondering if the White House can comment on what impact, if any — you know, positive, negative — the surge in immigration that we’ve been seeing over the last couple of years has had in, you know, shaping employment or unemployment, as well as inflation. Thank you.
WHITE HOUSE OFFICIAL: Look, I think a number of things have been very important in seeing the great rebound in labor participation. What’s very important to recognize is that for American citizens, participation rates in the labor force are actually at very high levels, and the employment rate for American citizens has also gone up to near record levels.
That said, this administration has also emphasized the importance of legal immigration and its contribution to our economy and has worked hard to improve visa processing times and generally to make sure that our legal immigration system is working as well as it possibly can.
MR. EDWARDS: Thank you.
Our next question will come from Courtenay Brown from Axios. You should be able to unmute yourself now.
Q Hey, it’s Courtenay. Thanks for taking our questions.
I’m trying to understand how we should interpret the administration’s touting of lower interest rates. I know you all have said that you have been very respectful of the Fed’s independence, but are you worried by bragging that lower interest rates are coming down you’re putting the Fed in a tough spot?
And then, just quickly, one of the reasons the Fed cut rates today is because the Fed is worried about the health of the labor market. How are you planning or how is the president planning to address the rise in unemployment that we’ve seen in recent months? Thank you.
WHITE HOUSE OFFICIAL: So, I think the president took a very clear approach. He said publicly that he would respect the independence of the Federal Reserve in fighting inflation. He has kept that vow, and we continue to think that that is absolutely central to solid economic management.
That’s a big contrast from his predecessor, who repeatedly criticized the Federal Reserve on his watch and undermined the independence of the Federal Reserve.
What this milestone really marks is that inflation, which is associated with the pandemic and with Putin’s invasion of Ukraine, is now back down to the same level that we saw the month before the pandemic began. And that’s really the basis on which broader market interest rates have been coming down, and so it is an appropriate time to mark this milestone.
The president took a number of very important actions throughout his administration — I think you heard about those earlier — that have contributed to that. And it is important to mark a moment at which Americans will be getting relief from both the decline in inflation and declining interest rates at a time when the labor market remains very robust.
With regard to the labor market, I think you heard today in the press conference references to the labor market remaining solid, and we also would just note that unemployment has remained the lowest on average of any administration in 50 years.
MR. EDWARDS: Thank you for that response. We have time for a couple more questions. I have seen some people join during this portion of the call, so I do just want to remind folks that we are in the background portion of the call. Attribution for answers during this portion is “White House officials.”
And with that, we will go over to Skylar Woodhouse from Bloomberg.
Skylar, you should be able to unmute.
Q Hey. Thanks, guys. Thanks so much for doing this. Just wanted to — so, this mo- — today kind of feels like a celebra- — a celebratory time for the White House and — you know, with interest rates coming down a little bit, you all saying, you know, inflation is coming down as well. But what do you — what is the White House’s re- — comment or a reaction to those, you know, in the American public who still say, you know, that cost of living is still way too high?
And I guess my question is, what would you all like to continue to see from — I guess, from the Fed and continuing to accomplish and how that relates to the goals that the Biden administration wants to accomplish throughout the rest of its term? Thanks.
WHITE HOUSE OFFICIAL: So, I think I’ll start. This is [White House official]. The president — Jeff said at the top of his remarks that this is not meant to be a declaration of victory; it’s meant to be a declaration of progress. And I think that you will definitely hear that from the president tomorrow, recognizing that int- — interest rates and inflation falling is a new milestone and a important one, but costs are still too high. And he will talk about his — his agenda to lower costs for our American families.
MR. EDWARDS: All right. Thank you.
And before we go to our last question, a reminder for folks who have just joined: This is the background portion of the call. Attribution during this portion is to “White House officials.” And as a reminder, both the background portion of the call and the remarks at the top are on embargo until tomorrow at 5:00 a.m.
With that, we will take our final question from Andrea at Reuters.
Andrea, you should be able to unmute yourself.
Q Thank you so much. Thanks for taking my question. I wanted to ask you about two things that are different. So, do — two different factors that could affect prices going forward.
One is the rising concerns about a broader regional war in the Middle East, and whether you’ve done any modeling about what that could do to inflation going forward and whether that could be, you know, a setback on this road to progress that you’ve mapped out.
Then the other thing is the persistence of high housing costs and the percentage that they, you know, account for in people’s monthly budgets, which are much higher than they used to be. Can you just walk us through where you think you see, you know, possible improvements and how long the efforts to create more affordable housing will take? Like, when will there be a sort of substantial decrease in housing costs? Thanks.
WHITE HOUSE OFFICIAL: Thanks for that. It’s [White House official].
On the first question, look, I think that where we are in the macro economy right now is a general point of labor market in balance, a strong labor market; inflation having come down significantly. You note, kind of, the geopolitical risks that we consistently monitor, but our assessment, you know, right now, is that the economy is in a healthy place, and that the kind of range of risks, while we continue to monitor them, do not pose a significant risk to the — to the outlook. Obviously, as you — we’re consistently monitoring energy markets, consistently monitoring a range of risks.
On your second question about housing costs. Look, this is a place that, you know, you’ll hear the president continue to emphasize where we need to take more action as a country to continue to bring down housing costs.
Part of that — part of the importance of the economic milestone that we find ourselves at right now is that folks will see some relief on housing costs. New homebuyers saving thousands of dollars a month, compared to — excuse me, thousands of dollars a year, compared to where rates were just a year ago. Folks who bought homes in the last couple of years now able to refinance and bring down their monthly payments.
But we very much understand and know that in order to really durably bring housing costs down and address the housing affordability challenges that folks are facing across the country, we need to build more housing in this country, and that means really a substantial investment in affordable housing. It means incentivizing state and local governments to reduce barriers to build that we know holds supply back and raises housing costs. So, that will continue to be an area of focus for the president and for the administration.
MR. EDWARDS: Thank you. That is all we have time for today. Thank you all for joining us on this call, and thank you to our speakers.
As a reminder, this call is embargoed until tomorrow at 5:00 a.m. That’s September 19th at 5:00 a.m., the embargo lifts on this call and its contents. And another reminder is that the Q&A portion was on background, attribution to “White House officials.”
Thank you again for joining us, and please follow up with me if you have any questions. Have a good afternoon.
4:41 P.M. EDT
