Tags: Obama | Crimea | crisis | economy

Obama Adviser Furman Sees Crimean Crisis Affecting US Economy

Friday, 21 March 2014 01:05 PM

The geopolitical crisis in Ukraine could affect the U.S. economy, the chairman of President Barack Obama’s Council of Economic Advisers said today.

“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, Furman said. Federal Reserve Chair Janet Yellen is doing a “terrific” job so far, the president’s chief economist said, and he expects the unemployment rate to continue to fall this year.

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 the president’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.

Geopolitical Effect

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 department’s review of the more than 20 applications to export natural gas.

Geopolitics and the effect on global markets are factors the department weighs when determining whether such an export application is in the national interest, Moniz said today at a Bloomberg Government breakfast.

On the domestic front, Furman gave modestly optimistic assessments for the future of the nation’s unemployment rate and health-care premiums under the Affordable Care Act. In accordance with projections in Obama’s proposed fiscal 2015 budget, Furman said the jobless rate, which was 6.7 percent in February, should drop over the course of 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.”

‘Way Lower’

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 originally projected, Furman declined to say whether rates will rise for consumers, only that they won’t be as high as initial 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 the implementation of the Affordable Care Act, Furman called Camp’s proposal to overhaul 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 release of the plan, Furman said.

Even 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 Yellen has handled herself well.

“Janet’s doing just a terrific job,” Furman said. “We knew how qualified she was when she was picked.”

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The geopolitical crisis in Ukraine could affect the U.S. economy, the chairman of President Barack Obama's Council of Economic Advisers said today.
Friday, 21 March 2014 01:05 PM
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