Janet Yellen, President-elect Joe Biden’s nominee for Secretary of the Treasury, called for a “major” action on the COVID-19 pandemic and the economic crisis at his Senate confirmation hearing on Tuesday. The Senate held confirmation hearings on Tuesday for Yellen and more senior members of the Mr. Biden’s office.
“Economists don’t always agree, but I think there is a consensus now: without further action, we risk a longer and more painful recession now – and long-term scars on the economy later,” argued Yellen.
Asked what would provide the greatest “return on investment” in economic relief, Yellen replied: “The relief we offer to those who need it most and small businesses have the best chance of providing so much relief to those who have been so severely affected by the pandemic. and generating a large amount of spending per dollar spent. “She said it” would create jobs across the economy “.
His call to action came just days after Biden presented an FDR-style vision to keep the coronavirus in check and face the economic crisis that has left millions of people out of work since the beginning of last year.
“In the coming months, we will need more help to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers at work, ”Yellen told Congress. “We need more resources to ensure that unemployment insurance checks remain in place and to help families at risk of starvation or losing their roof over their heads.”
US $ 1.9 trillion Biden rescue plan includes provisions such as extending enhanced unemployment benefits until September and increasing those benefits from the current $ 300 a week to $ 400 a week, sending direct relief to families in the form of $ 1,400 checks, the national vaccine distribution plan and a number of other relief measures. Yellen recognized the $ 1.9 trillion price on Tuesday.
“Neither the president-elect nor I propose this relief package without an assessment of the country’s debt burden,” said Yellen. “But now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have struggled for a long time. “
Republican Senator Rob Portman of Ohio asked Yellen about the Treasury secretary’s role in being the voice of “fiscal sanity” in the administration. She told him that, in the short term, she feels that “we can pay whatever it takes to get the economy back on track, to help us overcome the pandemic,” and she pointed to research in other countries suggesting that it often ” spending money dealing with a weak economy creates a smaller debt burden in the long run than failing to provide that support. ”
Yellen said “we have to ensure that, ultimately, the deficits we run, if we do that, are consistent with fiscal sustainability”, but she noted that “the world has changed”. Yellen predicted that interest rates would remain low for a long time, although she also said that higher interest rates are a risk that must be taken into account “when designing a sustainable and responsible policy”.
Yellen, who previously served as president of the Federal Reserve from 2014 to 2018, said he believes the Treasury Secretary has a dual mission: to help Americans overcome the pandemic and get back to work and also to rebuild the economy so that American workers can compete globally.
Yellen was one of five Biden nominees to testify before Senate committees on Tuesday. Designated Secretary of State Tony Blinken, Secretary of Defense appointed retired general Lloyd Austin, Designated Secretary of the Department of Homeland Security Alejandro Mayorkas and appointed Director of National Intelligence Avril Haines he also appeared before Senate lawmakers.
If confirmed, Yellen will be the first woman to serve as Treasury secretary in the department’s more than 230-year history. Previously, she was also the first woman to serve as president of the Federal Reserve.
Adam Brewster contributed to this report.