A Conversation with Brian Deese, Director, White House National Economic Council

Economic Recovery Metrics Driven by the American Rescue Plan (ARP):

• Unemployment rate fell to 3.9% in December 2021, a reduction four years faster than anticipated.
• Full-year 2021 GDP growth is estimated between 5% and 6%, the strongest performance since the mid-1980s.
• Household incomes adjusted for inflation rose in 2021, a unique global dynamic attributed to the ARP.
• The child tax credit and direct relief reduced child poverty by 35% to 40%.
• Emergency rental assistance contributed to a 60% reduction in evictions throughout 2021.

Implementation and Strategic Use of ARP Funds:

• Funds are being utilized for sustained, multi-year recovery efforts rather than one-off stimulus, addressing long-term issues like learning loss and childcare.
• ARP resources are being leveraged to fund job training for critical construction and logistics sectors, serving as a bridge to the Bipartisan Infrastructure Law (BIL).
• Investments in clean water under the ARP are being integrated with long-term federal efforts to remove all lead pipes and service lines.
• The administration emphasizes a "bottom up, middle out" implementation philosophy to ensure localities control resource deployment.

Industrial Strategy and Infrastructure Deployment:

• The administration is framing the BIL as the engine for a new 21st-century American industrial strategy, aiming for a 20-year gap in infrastructure investment to favor the U.S. over China in 2022.
• Mitch Landrieu, former mayor of New Orleans, has been appointed to lead the implementation of the infrastructure law.
• Specific deployment challenges include EV charging infrastructure (solving "range anxiety" in rural/low-density areas) and affordable broadband access in underserved urban and rural zones.
• The administration seeks to catalyze private capital for public investments, noting that public capital is essential where the economic case alone is insufficient.

Climate Resilience and "Build Back Better" Economics:

• The financial system must be reoriented to account for climactic instability, which is no longer a stable assumption for debt issuance and investment.
• The "Build Back Better" agenda is described as fully paid for, aiming for a zero net impact on the federal fiscal position while increasing economic productive capacity.
• Projected climate-related infrastructure losses could reach trillions of dollars by 2050 if extreme weather impacts are not mitigated.
• The administration argues that reducing family costs for childcare, healthcare, and prescription drugs will lower long-term inflationary pressure.

Near-Term Economic Challenges:

• The Omicron variant is exerting pressure on the labor supply and supply chains, creating disruptions in the service sector.
• Geopolitical tensions involving Russia and potential military action against Ukraine are being monitored for their impact on global energy markets and European economic stability.
• Immediate priorities include unsticking supply chain bottlenecks at major ports (Oakland, Long Beach, Savannah, Georgia) and increasing apprenticeships in the trucking industry.

Equity and Regional Development Initiatives:

• An inter-agency working group has been established to revitalize the economies of coal and fossil fuel-dependent regions, focusing on human and physical capital retention.
• The Economic Development Administration is deploying $3 billion in ARP funds for the "Build Back Better Regional Challenge" to empower local communities with planning and capital.
• The administration is prioritizing partnerships with Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs) to build regional R&D clusters.

Outlook on Capital Markets and Investment:

• Brian Deese describes himself as an "impatient optimist" regarding the engagement of private capital for climate and infrastructure projects.
• He notes that while capital movement often takes longer than anticipated to reach tipping points, once those thresholds are crossed, deployment accelerates rapidly.
• Cost curves for clean energy and deployment are trending downward, making the transition economically viable without solely relying on public subsidies.
• The administration acknowledges the need to move faster and more successfully than achieved in the previous year to meet 2030 and 2050 goals.