Press Call by National Economic Advisor Lael Brainard and Senior Administration Officials Previewing President Biden’s State of the Union Address and Economic Agenda
Via Teleconference
(March 6, 2024)
6:08 P.M. EST
MODERATOR: Hi, everyone. Thank you for joining us this evening ahead of the President’s State of the Union tomorrow.
Today, we will be holding a press call to preview the President’s State of the Union and his economic agenda, which is lowering costs and creating a fairer tax system.
We will begin with on-the-record opening remarks from National Economic Advisor Lael Brainard and then take questions on background.
The content of the call and the materials that you received are embargoed until tomorrow at 5:00 a.m.
Lael, with that, I’ll turn it over to you.
MS. BRAINARD: Well, thank you, and thanks to everyone for joining us this evening.
Tomorrow night, President Biden will discuss the historic achievements he has delivered for the American people and lay out his vision for the future. The President will describe how far we’ve come since he took office three years ago and the work that lies ahead to build our economy from the middle out and bottom up, not the top down.
It’s remarkable how far we have come. When President Biden and Vice President Harris came to office, they faced an immediate economic crisis. We were in the midst of a raging pandemic, tens of millions of Americans were unemployed, hundreds of thousands of small businesses were at risk of closing, and supply chains were badly broken.
Since that time, President Biden’s economic plan has led to the strongest recovery in more than 50 years. Since the President took office, the economy has added nearly 15 million jobs, the unemployment rate has been below 4 percent for two full years at a time when inflation has come down by two thirds, wages have risen by more than prices and are higher than before the pandemic, and we are seeing a small-business boom.
President Biden’s economic agenda is investing in America — in all of America, helping communities that had been left behind make a comeback. We’ve seen 47,000 infrastructure projects in 4,500 communities all across the country, and businesses have made $650 billion investments in clean energy and manufacturing — $650 billion in investments.
The President will also lay out his plans to lower costs and create a fairer tax system. President Biden will highlight that lowering costs for working families is his top economic priority.
President Biden has taken on Big Pharma to lower prescription drug costs. He’s lowering energy prices for American families by investing in clean, affordable energy. He’s taking on junk fees and shrinkflation. By cutting overdraft fees, credit card late fees, and other hidden fees, the President will save Americans more than $20 billion a year.
Tomorrow, in his State of the Union, you’ll hear President Biden talk about his efforts to lower costs and crack down on junk fees. And he’ll also talk about important new actions to lower housing costs for working families around the country.
The President will also lay out his vision to make our tax code fairer and to lower the deficit by making big corporations and the wealthy pay their fair share. President Biden is fighting to make our tax code reward work, not wealth, so billionaires do not pay less than school teachers or firefighters and to ensure the wealthy cannot get away with cheating on their taxes.
For example, in addition to reversing the corporate rate cut in the 2017 tax law, he’s proposing to raise the rate for the corporate minimum tax he signed into law to 21 percent. He’s also calling for a new proposal that would deny corporate tax breaks for executive compensation above $1 million. And he is fighting to cut taxes for working families and the middle class by restoring his full Child Tax Credit to cut taxes for tens of millions of families.
None of his policies will raise taxes by a single penny on anyone making under $400,000 a year. While the President wants to cut taxes for working families, congressional Republicans want to cut taxes even more for the wealthy and big corporations, all while adding more than $3 trillion to the debt.
President Biden has made clear whose side he is on. Every day, we see him fighting for working people and middle-class families like the ones he grew up with in Scranton. The President will continue to put the middle class first as he lays out his plan for the American economy.
Thank you.
MODERATOR: Thanks so much, Lael. We’ll now take some questions on background.
For your awareness on this call but not for reporting, taking questions will be [senior administration official] and [senior administration official].
If you have a question, please raise your hand.
I’ll start with Josh Boak.
Q Hi. [Senior administration official], [senior administration official], thanks so much for doing this. Quick question: Apples to apples, you say that the Republican plans would increase the debt by $3 trillion over 10 years. What would the President — what would his plans — what would the impact be on the debt for him?
SENIOR ADMINISTRATION OFFICIAL: This is [senior administration official]. The President will put out a budget next week that will reduce the deficit by $3 trillion over 10 years.
MODERATOR: Great. I’ll now turn it over to Akayla Gardner.
Q Hey, guys. I wanted to ask about the corporate tax minimum. I know Brainard just said 21 percent, but I had thought that the President wanted or was proposing it to go to 28 percent. And also, could you just say whether he’ll talk about the 25 percent tax on billionaires in his speech tomorrow.
SENIOR ADMINISTRATION OFFICIAL: This is [senior administration official] again. So, yes, the fir- — yes and yes are the answers to your questions.
So, the President’s proposal is to raise the corporate rate to 28 percent. That’s reversing, in large part, the cut in the corporate rate from the 2017 tax law. He has also signed into law a 15 percent minimum tax on large corporate — lar- — large profitable corporations to ensure that companies are, in fact, paying tax.
He will, in this budget that he proposes next week, propose to raise that 15 percent rate to 21 percent for the corporate minimum tax.
And then, on your question of — of the billionaire minimum tax, I mean, I don’t have anything specific to preview about the speech. But I will say that — you know, that the President is of the firm view that we cannot have a tax system where middle-class folks are paying a lower [higher] tax rate in some cases than billionaires. And so, he has put forward a billionaire minimum tax proposal, and you can expect him to talk about that going forward.
MODERATOR: Thanks. We’ll now turn it over to David Lawder.
Q Hi. Thanks for doing this call. Another — another question on the corporate minimum tax rate. You know, there is the proposal — you know, the plan out there for a global corporate minimum tax of 15 percent, which would sort of match up with, you know, the U.S. corporate minimum.
Is there any concern that this would put — you know, if he raised that to 21 percent, that this would sort of put the U.S. at a disadvantage to other — other countries when there was a lot of effort put in to trying to sort of get everybody on that — on that same — that same tax rate? Thanks.
SENIOR ADMINISTRATION OFFICIAL: Yeah, thanks for the question. No, our — our proposal also on the international tax front — our global minimum tax proposal — would put in place a 21 percent rate there. So, we’d have both the 21 percent global minimum tax. We’d have 21 percent corporate minimum tax for the domestic corporate minimum tax as well.
Q So, would you — I mean, would you be pushing other countries to raise theirs to 21 percent as well, or the U.S. is okay being above other countries in that rate?
SENIOR ADMINISTRATION OFFICIAL: I think, you know, we’re going to — we’re going to be in a place where we’ll put forward the 21 percent proposal. We’ll call on other countries as well to continue to put forward measures like that. And, you know, I think that that is kind of consistent with where our international negotiations have been.
MODERATOR: We’ll now turn it over to Eric Levitz.
Q Hey. Yeah, just two fairly straightforward questions. One, I was wondering what specific housing policies the administration is planning to highlight tomorrow and if tho- — any of those require congressional cooperation. And then, also, I was just wondering if any of the unfulfilled aspects of “Build Back Better,” in terms of its social programs — not the tax side of it, but childcare, et cetera — the — is the President planning to spotlight.
SENIOR ADMINISTRATION OFFICIAL: Yeah, so — I’m sorry, what was the — the first part of your question was the — housing. Sorry.
So, on housing, I don’t have anything specific to preview for you. What I will say is that the President, you know, will be putting forward a series of proposals that both go to expanding the supply of housing, helping renters, helping homeowners also with — with assistance to lower costs for them. We’ll have more on that tomorrow.
Some of them will require congressional action. You know, similar to the second part of your question, you know, we really see lowering housing costs and boosting the supply of housing as a key unfinished component of the President’s economic agenda.
And then, he also, I think, you know, going forward, will continue to highlight administrative actions we’re taking to lower housing costs.
And then, on the second part of your — of your question, you know, we will continue — in the budget, in other contexts — to highlight a range of measures that would lower costs for American families: cos- — lower housing costs, lower childcare costs, to — proposals to lower education costs.
And it really is a stark contrast with, you know, congressional Republicans who, instead of putting forward proposals that are fundamentally about lowering costs for working families, have instead prioritized tax cuts for the wealthiest Americans, for large corporations. And so, you can anticipate that the President will make that contrast very clear.
MODERATOR: We have time for a couple more questions. I’ll turn it over to Andrew Restuccia.
Q Thanks. On the — the denying companies tax breaks if they pay employees over a million dollars. Can you lay out, like, which tax breaks would be denied? And then, also, do you have an estimate of how many companies this would affect? Presumably, there’s a lot of companies that pay people over a million dollars. Thanks.
SENIOR ADMINISTRATION OFFICIAL: Yeah, so — so, you know, we think this proposal would — would raise more than $250 billion. And we can follow up with you with an exact. And, you know, the structure of this proposal is that C corporations would not be able to deduct compensation above $1 million for any given employees.
That’s an expansion in the current tax — in current law where deductions are not allowed for the CEO, the CFO, and a number of other officers. But this would expand that to include anybody who is being paid over a million dollars. And as I noted, you know, I think it would raise substantial revenue.
And, you know, I’d just lastly kind of point out: It’s not that, you know, the President has any problem at all with folks getting high salaries from — from their companies above a million dollars; it’s that, you know, we don’t think that — that companies should be able to take deductions for that compensation.
MODERATOR: And for our final question, I’ll turn it over to Alexander Rifaat.
Q Hi. Thanks for doing this. I have two questions. First, a big part of the President’s economic agenda has centered around tax credits to — to entice clean energy production, development; also encourage consumers to purchase electric vehicles. But the subsidies do come with certain domestic content requirements that has sort of put it at odds with allies in Europe.
And I know that the White House created a task force on the — on the Inflation Reduction Act after it was passed. Also, created, I believe, a task force, as well, with the UK in order to sort of come up with some sort of agreement on the subsidies.
I just wanted to know if there was sort of any — if the White House had any sort of update on that — on negotiations there, if there was a timeframe for those negotiations.
And then, secondly, another aspect of the — of the President’s tax policy is sort of centered around this idea of sort of making it more equitable. The Treasury Department created an Advisory Committee on Racial Equity. But one of the members there, Dorothy Brown, sort of — they made recommendations to — to Secretary Yellen. And, essentially, they have not heard back from the Secretary, and she sort of called on the White House as — to sort of get involved.
I just wanted to see if the — if there was, sort of, any reaction on that; if there was any sort of timeline for, sort of, the — the, sort of — the — implementing any of the recommendations that this committee is making to the Treasury Department as it pertains to, you know, sort of, the tax system. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Thanks for that. On the second one, I’d refer you to Treasury. I don’t have an update there.
And then, on the first, I mean, you know, broadly speaking, we are very focused on making sure we’re implementing the clean energy credits in a manner that’s deploying rapidly clean energy technologies, lowering clean energy costs for folks, while also making sure that the domestic content requirements that are — that are put in place are implemented effectively. So, we’re very focused on that.
We’re also focused on working with international partners who are themselves adopting incentives for clean energy deployment and production throughout the world. On the kind of specifics of those tasks forces, I’d — task force, I’d refer you to NSC.
But just, you know, broadly, this is a key area of focus for us.
MODERATOR: And with that, we will conclude our call. It is embargoed until 5:00 a.m. tomorrow.
As mentioned at the top, the questions and answers were on background and are attributable to “senior administration officials.”
Thank you. And tune in at 7:00 p.m. tomorrow — no, 9:00 p.m.
Thank you.
6:24 P.M. EST
