Treasury Secretary Janet Yellen intends to use part of her major economic speech in Detroit Thursday to focus on initiatives the Biden administration is undertaking to combat climate change as she embarks on a month-long push to sell the president’s agenda ahead of the midterm elections.
“Given the existential threat posed by climate change, it is imperative that we address it,” Yellen will say, according to excerpts provided to FOX Business. “Our plan — powered by the Inflation Reduction Act — represents the largest investment in fighting climate change in our country’s history.”
The legislation, signed by President Biden Aug. 16, raises an estimated $739 billion over the next decade, with about half of the money going toward programs to fight climate change and reduce health care costs and the remaining half going toward paying down the $30 trillion national debt.
Yellen said the bill, which encourages investments in green technology and energy through a slew of new tax credits, will help the U.S. end its dependence on fossil fuels. She said experts estimated the law will put the U.S. on the path to cutting emissions by 40% within eight years compared to 2005 levels.
“It will put us well on our way toward a future where we depend on the wind, sun and other clean sources for our energy,” she plans to say. “We will rid ourselves from our current dependence on fossil fuels and the whims of autocrats like [Russian President Vladimir] Putin.”
The speech comes as Yellen and Biden attempt to sell this summer’s legislative package, along with last year’s bipartisan infrastructure law, as a way to increase the U.S. economy’s productive capacity, reduce inflation and put more money into consumers’ pockets ahead of the November midterms. Democrats risk losing their already razor-thin majorities in the election.
Republicans have warned that additional spending will only fuel the nation’s inflation crisis. Prices remained near a record high in July, with inflation surging 8.5% from the previous year.
There is a growing consensus on Wall Street that the Federal Reserve will trigger a recession as it battles inflation with a series of aggressive interest rate hikes.
Policymakers approved back-to-back 75 basis point rate hikes in June and July and have indicated that another supersized rate hike is on the table in September, depending on forthcoming economic data.
Hiking interest rates tends to create higher consumer and business loan rates, which slows the economy by forcing employers to cut back on spending. Mortgage rates have nearly doubled from one year ago, and some credit card issuers have ratcheted up their rates to 20%.
“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Fed Chairman Jerome Powell said recently. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
FOX Business’ Jacqui Heinrich contributed to this report.