In Chicago, Janet Yellen, the Secretary of the United States Department of the Treasury, delivered a speech on the current state of the U.S. economy. Her remarks focused on the middle class and how they have been supported by the present administration.
According to a transcript released by the U.S. Department of the Treasury, Yellen credited the middle class for their role in building most cities in America, including Chicago. She emphasized that sharing benefits from a growing gross domestic product (GDP) with this demographic could lead to improved living conditions and bolster the US economy. The pandemic-induced bottleneck in supply chains has put increased strain on this group. In April 2020, unemployment peaked at 15%, with wage earners in the bottom quartile accounting for 80% of job losses. The American Rescue Plan was implemented to support middle-class Americans through financial aid for daily needs such as tax credits, emergency rental assistance, and homeowner assistance. An expansion of Child Tax Credit also resulted in a significant reduction in child poverty - an unprecedented event in American history. These efforts collectively led to an increase in aggregate supply for the US economy, directly benefiting the middle class.
Yellen further noted that amid geopolitical challenges, the administration continued its support for American consumers and middle-class citizens. "In response to Russia’s invasion of Ukraine and resulting impacts on global energy markets and American middle class," she said, "we released 180 million barrels from the Strategic Petroleum Reserve." In conjunction with an international coalition of partners, a novel price cap was placed on Russian oil. According to Yellen, these actions curtailed Russia's ability to finance its war while ensuring well-supplied global energy markets and lower energy prices for American families. Despite long-term investments aimed at transitioning towards clean energy, immediate needs were met through record domestic oil and natural gas production which resulted in declining energy prices.
The Treasury's future plans to further assist the middle class, as outlined in the speech release, are based on three pillars: infrastructure, manufacturing and energy, and tax policy. The Bipartisan Infrastructure Law saw an investment of $1.2 trillion into the development of the nation's infrastructure, which is expected to create job opportunities and provide rural areas with better access to high-speed internet. The CHIPS and Science Act has incentivized businesses with tax breaks and grants to invest in clean energy, leading to over $600 billion being invested by companies into this sector.
