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Janet Yellen: The IRS Needs Additional Funding

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In an interview with NPR’s Michel Martin, Treasury Secretary Janet Yellen said that she’s “concerned about the slowdown in the global economy” in light of recent forecasting by the World Bank, but remains optimistic given this morning’s inflation data.

Highlights are available below and can be cited with attribution to NPR. Listen to the full interview: HERE

Yellen believes the single most important factor that would improve the world’s economic outlook would be an end to Russia’s war in Ukraine: “I think that invasion and the brutality and the economic spillovers from it are a very important factor that is responsible for diminished global growth at a time when we’re just beginning to encouragingly recover from the pandemic.

 

And the high food prices and energy prices that it’s caused are being felt, particularly in Africa….And it is a tremendous concern.”

Interview With Treasury Secretary Janet Yellen

The interview – which will air across Morning Edition tomorrow and All Things Considered on Saturday – comes just days before Secretary Yellen heads to three African countries – Senegal, Zambia and South Africa — on behalf of the Biden administration, just weeks after President Biden’s US- Africa Leaders Summit, which took place last month.

Janet Yellen says her goal for the trip is to build better economic relations with Africa, which is home to some of the fastest growing populations and economies in the world – as well as to address food security, infrastructure development, and debt restructuring.

Below are a few highlights from the interview, which have been edited for clarity and length. The raw audio can be found in collection 4408776 – and the following quotes have been checked against the tape.

On her upcoming trip to Africa, which will consist of visits to Senegal, Zambia and South Africa:

“We want to expand trade and investment with Africa. I’m going to be meeting with government and private sector leaders to discuss how we can do that. And we really see Africa as a key driver of global growth in coming decades. It will be important to Africa and to the world to make sure that [a] rapidly growing cadre of young people are able to find high-quality jobs.

It’s a place that the United States, many companies are already investing in and will see opportunities to invest and help create those jobs for a growing middle class. And there will also be new markets in customers for American firms. And we particularly want to help Africa create jobs of the future, including in the digital economy, modern agriculture, and by promoting entrepreneurship.”

On this morning’s inflation data:

“Well, inflation has really been quite moderate, quite low for the last six months or so. In this morning’s report, the inflation overall was negative…. We continue to see improvement in supply chains.

Goods prices have actually been falling, and some of the supply chain issues that pushed up the prices of goods and commodities have really turned around and mitigated. Rent indexes continue to rise. But really, we see those coming down substantially over the next six months or so.”

 

On whether she thinks the Federal Reserve will be able to achieve a “soft landing” for the economy, despite concerns of a possible recession:

“I think we have an independent Fed. I trust them to make the best judgments that they can about what’s necessary to accomplish their dual mandate, which is to bring inflation down and to try to maintain a strong labor market.

I think there is a path there that makes that possible. When I see numbers like those we saw this morning, it makes me feel more hopeful and more confident that we will be able to accomplish both lower inflation and a strong labor market. But I wouldn’t try to second guess them.”

On why the IRS needs increased funding, in light of House Republicans’ attempts to defund it:

“The IRS needs this additional funding because it has been starved for resources for over a decade, and that’s left it in a position where we have an extremely unfair tax system in which honest lower and middle income households pay the taxes that are due…. but they’re failing to collect taxes from very wealthy and extremely high income taxpayers. I

t’s estimated that there is a loss of on the order of $7 trillion in tax revenues over the next decade, almost $2 trillion a year, because the IRS simply hasn’t been able to hire the staff it needs to do the sophisticated audits to collect that.”