The geopolitical crisis in Ukraine may have an impact on the U.S. economy, the chairman of President Barack Obama’s Council of Economic Advisers said.
“We’re certainly monitoring that situation closely, and there’s a range of things that affect our economy, and that could certainly be one of them,” Jason Furman said in an interview for Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “But what’s going to happen with consumer spending, what’s going to happen with investments in housing, and broader trends in our economy all matter, too.”
The White House has been in contact with House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, about his proposal to reshape the U.S. tax code, the president’s chief economist said, commenting on another matter.
He also said Federal Reserve Chair Janet Yellen is doing a “terrific” job so far, and that he expects the U.S. unemployment rate to continue to fall this year.
Russian President Vladimir Putin’s “appetite is unsated,” Strobe Talbott, a former deputy secretary of state, said in an interview on the same program.
“We should not kid ourselves into thinking that now that he’s grabbed” part of Ukraine “and made it part of the Russian Federation that that’s it,” said Talbott, who served at the State Department under President Bill Clinton.
Putin yesterday formalized the annexation of Crimea from Ukraine amid concerns that he may have designs on other parts of the country.
Talbott, while calling it “too soon” to say how effective the U.S. response with sanctions for high-ranking Russian officials has been, also said: “It certainly hasn’t changed Russian behavior and it’s not going to change Putin’s own predilections.”
While Furman suggested other concerns are closer to the center of his economic-danger radar than Russia’s annexation of Crimea, he said it would be unusual if Obama’s advisers weren’t keeping an eye on the conflict.
“We always pay attention to these types of events,” he said.
Furman declined to discuss why the White House isn’t accelerating exports of natural gas to help domestic producers, increase U.S. influence and decrease the leverage that Russia -- with its 30 percent share of the European natural-gas market -- holds over its neighbors. The Energy Department is reviewing applications for exports on a “case-by-case” basis, he said.
Separately, Energy Secretary Ernest Moniz said Russia’s ability to use its energy resources to influence nations like Ukraine may play a role in the U.S. department’s review of the more than 20 applications to export natural gas.
Geopolitics and the effects on global markets are factors the department weighs when determining whether such an export application is in the national interest, Moniz said yesterday at a Bloomberg Government breakfast.
Talbott, asked about lifting the ban on crude oil exports for pressure on Russia’s oil-dependent economy, said: “Yes, but as with pretty much all of the economic sanctions, they are intended to have a punishing effect on Russia, to make Putin pay a cost. But there are going to be costs for us as well.”
The U.S. sanctions against Russia are “part of a chess game that’s now going to be played out,” Talbott said. Yet “this has been a one-man show. I don’t think since Stalin was in the Kremlin has there ever been a single individual who could do something like this entirely on his own.”
The era of Russian leaders such as Mikhail Gorbachev and Boris Yeltsin is over, Talbott added.
“We now have overtly and pugnaciously a leader in the Kremlin who does not believe that the fundamentals of the U.S.- Russian relationship and the relationship between Russia and the West is one of partnership. He sees it as adversarial and competitive,” he said. “So it’s a new ballgame.”
On the domestic front, Furman gave modestly optimistic assessments for the future of the U.S. unemployment rate and health-care premiums under the Affordable Care Act. In accordance with projections in Obama’s fiscal 2015 budget plan, Furman said the jobless rate, which was 6.7 percent in February, should drop during this year.
“I don’t have a new forecast,” he said, “but I’d expect it to continue to fall from where it is today.”
Seizing on a recent Congressional Budget Office report that insurance premiums under the president’s health-care law will be 15 percent lower than the agency initially projected, Furman declined to say whether rates will rise for consumers -- only that they won’t be as high as the estimates.
“They’re already way, way lower than we would have thought they’d be,” he said. “I look for premiums continuing to be below what was originally projected,” he said, adding that “the insurance companies will be setting their premiums.”
While there’s little common ground between Obama and congressional Republicans on implementation of the Affordable Care Act, Furman called Camp’s proposal to revamp the tax code a “constructive” addition to the long-running debate over how to adjust corporate tax rules.
“There certainly have been conversations,” between Camp and the administration since the plan’s release, Furman said.
Though he’s close to Larry Summers, the former Treasury secretary and National Economic Council director who had been in competition with Yellen for the Fed chairmanship, Furman said Obama’s choice for the post has handled herself well.
Yellen is “doing just a terrific job,” Furman said. “We knew how qualified she was when she was picked.”