US Economy Not at Risk of Recession, Says Treasury Official
Treasury Secretary Scott Miller discussed the lasting economic consequences of the recent 43-day government shutdown, estimating a permanent $11 billion damage to the U.S. economy while expressing confidence in robust growth prospects during the 2026 fiscal year. Speaking on NBC’s “Meet the Press,” Miller attributed the negative impact to specific sectors sensitive to interest rates, primarily housing, noting that these areas had experienced a recession directly related to the shutdown’s disruption. Despite the disruption, Miller remained optimistic about the overall economic outlook, citing the anticipated effects of easing interest rates and the ongoing tax cuts as key drivers of a strong, non-inflationary growth economy by 2026. He explicitly refuted claims that President Trump’s tariffs were the primary cause of inflation, repeating a stance long held by the Trump administration—that the services economy was the more significant factor.
The 43-day government shutdown, the longest in U.S. history, has left a substantial and persistent mark on the U.S. economy. Miller’s assessment of an $11 billion permanent hit underscores the severity of the disruption. This figure represents the cumulative effect of lost economic activity, delayed investments, and the overall uncertainty created by the shutdown’s prolonged closure of federal agencies. The impact was most keenly felt in sectors reliant on federal contracts, government-backed loans, and timely government approvals – areas where bureaucratic delays directly impeded business operations. Experts had long warned of the potential for such a large-scale disruption, and Miller’s quantification provides a concrete measure of the economic damage.
A central point of Miller’s argument revolves around the distinction between inflated inflation readings and the underlying drivers of price increases. He firmly rejected the notion that President Trump’s tariffs on imported goods, such as food – specifically highlighting the reductions in tariffs on bananas and coffee – were responsible for the recent inflationary pressures. Instead, Miller identified the services sector as the more significant contributor to inflation, arguing that this sector is particularly sensitive to interest rate fluctuations. This aligns with the traditional viewpoint of the Trump administration, and Miller’s insistence on this point suggests a deliberate effort to redirect blame away from trade policies. Furthermore, he stressed a comprehensive approach to evaluating inflation, emphasizing the need to consider all relevant economic indicators rather than focusing solely on a composite number.
Beyond addressing the immediate fallout from the shutdown, Miller highlighted several key policy changes strategically designed to bolster real income levels for working Americans. These included measures intended to cap taxes on overtime pay, reduce taxes on tips, and modify Social Security benefits for certain individuals. He asserted that these adjustments would directly contribute to increased purchasing power, effectively offsetting rising costs. Crucially, Miller projected significant federal tax refunds for taxpayers during the first quarter of 2026, contingent upon these policy changes. The anticipated tax reduction represents a direct effort to alleviate financial strain on the working population, demonstrating a targeted approach to economic recovery.
The Treasury Secretary also pointed to a series of newly negotiated trade agreements as vital boosters for the American economy. These agreements, particularly those focused on reducing tariffs on food imports like bananas and coffee, were presented as a key element in stimulating economic activity and attracting investment across the nation. Miller anticipates a wave of new plant openings throughout the country as a direct consequence of these trade initiatives. This suggests a proactive strategy to encourage business expansion and job creation, leveraging international trade opportunities to drive economic growth. The focus on attracting investment underscores a desire to revitalize key sectors of the economy.
With the government’s funding secured through January 30th, setting the stage for future political disputes, Treasury Secretary Miller expressed optimism about the U.S. economy’s performance in 2026. He believes that a strong economic foundation is being laid, thanks to easing interest rates and the existing tax cuts. While acknowledging the potential for future challenges, Miller’s confidence reflects a calculated assessment of the current economic landscape. The department’s plans, including significant tax refunds and increased investment, are intended to mitigate potential downturns and ensure a robust, non-inflationary growth trajectory for the nation’s economy.
