The following testimony was presented to the United States Joint Economic Committee on Wednesday, October 6, 2021.
Chairman Beyer, Ranking Member Lee, and Members of the Committee:
My name is Wendy Edelberg and I am the director of The Hamilton Project and a senior fellow at the Brookings Institution. Before coming to Brookings, I was chief economist at the Congressional Budget Office. Thank you for this opportunity to discuss the effects of the tax provisions currently being considered in the reconciliation package.
Despite the headwinds created by the Delta COVID-19 variant, the economy is recovering. Economic growth during the pandemic has generally surpassed consensus expectations while households and businesses have maintained a surprising amount of activity and spending while social distancing. Much of that strength owes to the fiscal support enacted by Congress over the last 18 months. The current rapid economic recovery and expected slowing in the near term creates risks that policymakers should heed. Nonetheless, the policy proposals that Congress is currently considering would not notably add to those risks.
This is the moment to strengthen the social insurance system and to enact an ambitious federal investment package. Together, those policy changes would make the U.S. economy more resilient and productive over the longer term. Additionally, they would broaden the degree to which prosperity in the United States is shared across workers and families.
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