WASHINGTON (Reuters) - One of President Joe Biden’s top economic advisers said on Friday the latest U.S. jobs report underscored the importance of continuing to pay enhanced unemployment benefits and passing the White House’s $1.9 trillion stimulus package in Congress.
Heather Boushey, a member of the White House’s Council of Economic Advisers, rejected concerns raised by former Treasury Secretary Larry Summers and others that the scale of the plan proposed by Biden risked driving up inflation.
“That argument ignores the reality of what today’s jobs numbers show, which is that... we’re seeing an economy that has been stalling,” Boushey told Reuters in an interview.
“The idea that we should pare back now, out of a future fear that maybe we might possibly do too much, just doesn’t seem consistent with the economic evidence we have in front of us,” she said. “The cost of inaction far outweighs the costs of perhaps doing a little bit too much.”
U.S. employment growth rebounded less than expected in January, with only 49,000 positions added, and job losses in December were worse than initially thought, the Labor Department reported Friday morning.
Summers argued in a recent op-ed in the Washington Post that there is a chance the stimulus “will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”
U.S. inflation remains at historically low levels as the country battles the economic fallout from the COVID-19 pandemic, but one measure of inflation expectations jumped on Friday to 2.19%, the highest level since mid-2018.
Boushey, Biden, Vice President Kamala Harris and other White House officials hammered home the administration’s key economic message on Friday in a series of interviews and speeches as lawmakers in Congress considered the administration’s stimulus proposal: spend more now to save the economy.
The Democratic-led U.S. House of Representatives on Friday passed a budget outline that will allow Biden’s relief package to go through Congress without Republican support in the coming weeks. The Senate, evenly split between the two parties, approved it in a pre-dawn vote, with Harris casting the tie-breaking vote.
“Unemployment benefits are one of the first lines of defense in any recession,” Boushey said. “So this is absolutely imperative, and it really is imperative that benefits remain on for as long as workers need them.”
Boushey also stressed Biden’s commitment to raising the federal minimum wage to $15 an hour from the current $7.25, an increase she said would be phased in to avoid a shock to the economy.
“This is an issue that really resonates with people because people believe ... everyone deserves a fair day’s pay,” she said. “I also just want to stress that this is something that the president is very much committed to - increasing wages for those at the bottom end of the labor market.”
Boushey, who has previously studied how family-friendly policies can support economic growth, also emphasized the need to reopen schools and childcare centers safely.
“Getting schools open is one of the most important pieces,” Boushey said. “But then we need to make sure that childcare centers can open and open safely” for their mostly female workers as well as for the families that need care, she added.
Reporting by Andrea Shalal and Trevor Hunnicutt; Editing by Heather Timmons, Kevin Liffey, Dan Grebler and Paul Simao
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