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The Economy

Representative Kevin Brady: ‘I Am Losing Faith’ in Jay Powell

Federal Reserve Chair Jerome Powell testifies during a U.S. House Oversight and Reform Select Subcommittee hearing on the coronavirus crisis on Capitol, June 22, 2021. (Graeme Jennings/Pool via Reuters)

The Houston-area congressman, the ranking Republican on the House Ways and Means Committee, spoke to me today in advance of tomorrow’s release of the preliminary estimate of GDP in the third quarter. His prediction was blunt: “It will prove President Biden is bungling the economic recovery. He’s a million jobs short of his promises, and we are stuck in a worsening labor shortage.” (See here for more on Brady’s point about jobs.) “Growth has already peaked for the president. It’s unfortunately downhill from here.”

The congressman blamed two policies, in particular, for labor-market problems: the administration’s expansion of Obamacare subsidies and its severing of the link between the child tax credit and work “for the first time since Republicans created it in 1997.” Brady also says that while “we all want higher vaccination rates,” he is hearing from employers in a range of sectors that they fear that a federal vaccine mandate will further reduce labor-force participation. He thinks it should at least be delayed until after the holidays.

Asked whether President Biden should appoint Jay Powell to another term as chairman of the Federal Reserve, Brady responded, “I am losing faith in his leadership. Not because of his qualifications. It appears to me the Fed has been, along with the White House, in denial about how serious inflation is and how long it will last. The Fed’s also for far too long downplayed the labor shortage. . . . I’ve felt that he has strong credentials and is sincerely trying to approach his leadership and job the right way, but I’ve been very disappointed, especially this year.”

It’s left-wing critics of Powell such as Senator Elizabeth Warren (D., Mass.) who are most likely to influence the president’s choice, but Brady’s remarks indicate that Powell cannot count on support from either side of the aisle.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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