Rep. Brady on Russia-Ukraine war: ‘Economic sanctions won’t stop those bullets’
Rep. Kevin Brady (R-TX) joins Yahoo Finance Live to discuss the U.S. response to the Russia-Ukraine war, inflation, the economic outlook as President Biden is set to deliver the State of the Union address, and oil prices.
Video Transcript
- All right, well, let's take a look at the US response to Russia's invasion in Ukraine, as well as the potential fallout and how that might impact President Biden's State of the Union speech tonight. Joining me now is Representative Kevin Brady for Texas's 8th District and lead Republican on the House Ways and Means Committee. Thank you for joining us today.
Now, starting with the Russia-Ukraine conflict, you've said that Russia's aggression in Ukraine makes a mockery of the rule of law, including the rules-based trading system, and our response must be strong and effective. What is Congress doing to put pressure, with sanctions or by other means, on Putin, as well as as you see these attacks still continuing?
KEVIN BRADY: Yeah, thank you very much. So there's no question that economic sanctions won't stop those bullets or those missiles. So lethal aid is the first and foremost way we can help Ukraine. They've made that very clear. But as far as economic sanctions, the world has changed over the last few days. And I think every country in the West, because of Ukraine's bravery here, is now engaging, I think, in a far more effective manner.
Certainly with Russia's aggression here, countries like America ought to be evaluating our-- Russia's role in the World Trade Organization, which, by its very nature, is a rules-based trading system. This is-- and we ought to be-- I've noticed more momentum over the last two days about an import ban of some design on Russian products. I don't know how that moves forward, but I know there is more of a bipartisan interest in that here in Congress.
And the two really ought to be considered sort of together because they have that same impact. You probably know this, as well, WTO can't just suspend a member. It's a consensus-based organization. This will take multiple countries taking action to repeal the most favored nation status on Russia, which, as you know, would increase tariffs on those Russian products.
- So then obviously, with so many countries needing to be involved with this holistic approach then, you've said it's important to be economically strong, as we are militarily strong, when it comes to confronting President Putin. How should the president go about striking that balance, then, especially given where inflation already was before the conflict, and how US consumers are struggling with the prices right now?
KEVIN BRADY: Yeah, so we know, you know, inflation really being jumpstarted after the passage of the president's $2 trillion COVID stimulus in March. I think he denied it and dismissed it for far too long, as did the Federal Reserve. And right now, for Americans, as the president takes the stage tonight, he ought to recognize more than half of Americans believe the economy in America is in a recession or depression, and 2/3 believe that prices will outpace their paychecks for the next two to three years.
So I think it's crucial that the president acknowledge his mistakes on the economy and take concrete actions. And in my view, one, it's all about the workers right now. And so all the emergency COVID programs that discouraged the jobless from returning to work need to end. The president needs to drop the tax hikes on American businesses that would drive inflation higher and make us economically vulnerable to China, Russia, and other foreign countries.
He also needs to end the Build Back Better provisions, because some of them, in fact, drive up childcare costs, and other issues that would actually discourage Americans from returning to work. There are a couple of other recommendations I have, as well, dealing with trade. But clearly, I think the president needs to reverse course in a major way if he's serious about our recovery being as strong as it can, and if he's serious about ending the worker shortage and driving inflation down.
- Now, as you mentioned trade, in your comments today, you said that Biden should focus on an aggressive trade agenda and open new markets. Which trade partners should the US be exploring or expanding into?
KEVIN BRADY: Yeah, so clearly we need more workers for the economy. We need more customers. And we know where they're at. They're outside of America. Right now, President Biden's trade agenda is basically a trade moratorium on new free trade agreements, exactly the time we should be leading on trade. Certainly, China has a predatory and very aggressive trade agenda, as well as our competitors like Japan and Europe and others. They're on the field reaching trade agreements that advantage their farmers, their manufacturers, their workers over American ones.
So I think there's bipartisan support quickly for an agreement with the UK. I think there is bipartisan support for engaging in the Asia-Pacific, including a second, more comprehensive agreement with Japan. Certainly, there's been bipartisan support for an agreement with Europe, as well as looking at new regions, like Kenya, Africa, other areas that we think could be door openers to better engagement in the developing world.
- Now, I want to turn to, obviously, the global economic fallout, as we see markets sort of swinging wildly depending on what they think is going to be happening next with the conflict. Now, Moody's Analytics chief economist tells Forbes that he expects the global economic fallout to be modest, but that if oil prices stay above $100 a barrel for a while, which obviously we did see those levels today, he said that US consumers could be seeing cost about $80 billion more at the pump. So what can be done for consumers at the pump right now?
KEVIN BRADY: So I think it's important to avoid gimmicks like a temporary suspension of the gas tax. One, it doesn't address the underlying issues, which is we're not producing enough American-made oil. And the president's really had a pretty aggressive attack on American-made energy, from pipelines to refineries to production themselves. And so I think the president, frankly, has created much of this.
And the answer is reverse those policies. We did have high gas prices at times during the Trump administration, but our economic growth was so strong because the policies were in place to produce more affordable energy here in the US. I think we need to return to those types of policy.
- And just quickly, a Post-ABC poll showed that 6 out of 10 Americans are feeling inflation has caused financial hardship in their households, even more so for those making under $50,000 a year. In a midterm election year, especially, what can be done, then? What are some of the economic policies that could give a boost to the economy right now?
KEVIN BRADY: Well, I think, again, since the president drove this inflation, he takes responsibility or bears responsibility for solving it. And clearly, the first thing he can do is not make it worse. The Build Back Better plan will make it worse. The higher taxes will drive more inflation. More government spending in the trillions will fuel more inflation, as well.
And again, he's got a number of proposals that would actually discourage Americans from returning to work. Those need to end. They need to be taken off the table. We-- it's all about the workers right now. And the focus ought to be reconnecting them to work.
- We do thank you for your time and your insights. Representative Kevin Brady there for Texas 8th District, and lead Republican on the House Ways and Means Committee. Thank you for your time today.
