Alan Krueger, President Barack Obama’s top economist, said uncertainty over regulations and government policy isn’t a major obstacle to U.S. growth, countering Republican criticism of the White House.
“A number of commentators have claimed that uncertainty is holding back the U.S. economy,” Krueger said in speech in Charlotte, North Carolina, according to a text released by the White House. “The evidence, however, suggests just the opposite.”
Krueger, 51, chairman of the White House Council of Economic Advisers, cited record corporate profits and a Bloomberg review of government data that found more new federal regulations were issued in the first 33 months of the George W. Bush administration than in the same period under Obama.
“If regulatory uncertainty was hurting companies, why would corporate profits be at record levels,” Krueger said. “Companies themselves rarely cite regulatory burdens as a reason for layoffs.”
Republicans in Congress have charged that business investment and economic growth have been slowed by the Obama administration’s regulatory policies, particularly the overhauls of financial regulation and health care that the White House backed.
Krueger said the slow pace of the U.S. economic recovery stems primarily from the after-effects of the 2008 financial crisis, the erosion of middle-class incomes during the past decade and the debt overhang from the collapse of the housing bubble.
He said the “clear” solution is a “balanced approach” that in the short term stimulates demand for goods and services and in the long term brings down government deficits.
He said renewing the two percentage point cut in payroll taxes and extended unemployment benefits, both of which are due to expire Dec. 31, “would provide a boost to economic growth in the coming year.”
Krueger’s speech to the Charlotte World Affairs Council was his first since succeeding Austan Goolsbee as Obama’s chief economist.