WASHINGTON – The Senate confirmed Janet L. Yellen, a labor economist and former Federal Reserve chairman, as Treasury secretary on Monday, replacing President Biden’s lieutenant in a dangerous economic moment as the new government tries revive the economy that was hit by the coronavirus pandemic.
By a vote of 84 to 15, the Senate confirmed Mrs. Yellen, making her the first woman to occupy the most important position in the Treasury in her 232 years of history. Her swift bipartisan confirmation underscored the support she has for both Republicans and Democrats, given her previous term as Fed chairman from 2014 to 2018.
Mrs. Yellen now faces a new and considerable challenge. As secretary of the treasury, she will be responsible for helping Biden prepare the $ 1.9 trillion stimulus package he proposed, conduct it through Congress and – if approved – oversee the distribution of trillions of dollars in aid.
The magnitude of the task was made clear over the weekend, when a bipartisan group of senators met virtually with senior White House officials on Sunday and expressed doubts that such a large package was necessary.
Lawmakers on both sides raised the prospect of restricting elements of the proposal, including eligibility for a suggested round of checks of $ 1,400 for individuals and ensuring a more targeted distribution of additional aid, according to several people familiar with the discussion. They also asked the White House to provide data to justify the proposed spending, which includes $ 350 billion in state and local aid and $ 130 billion to reopen schools closed by the pandemic.
Now, Yellen will be thrown into the middle of negotiations, responsible for convincing many Republicans and some Democrats that the economy needs another multi-trillion dollar spending package. In her confirmation hearing and in written responses to lawmakers, Ms. Yellen echoed Biden’s view that Congress should “act big” to prevent the economy from suffering long-term scarring and advocated the use of borrowed money for financing another aid package, saying it would not do it would make workers and families worse off.
“The relief bill at the end of last year was just an initial payment to help us in the coming months,” said Yellen. “We have a long way to go before our economy fully recovers.”
Ms. Yellen also argued that “short-term fiscal support is not inconsistent with long-term fiscal sustainability”, explaining that a healthier economy would end up generating more revenue for the government.
The Biden government said it expects a package to win bipartisan support in Congress. However, if Democrats signaled a willingness to resort to a budgetary mechanism known as reconciliation, it would allow them to pass legislation by simple majority and circumvent the necessary 60-vote limit.
David Wessel, a senior member of the Brookings Institution, where Yellen most recently worked, said she is likely to play an important role in working with Congress, given her credibility with both Republicans and progressive Democrats. He suggested that, because of Biden’s long history in the Senate, Ms. Yellen could be less involved in bargains with legislators and deployed to make the economic case for certain policies.
“I hope they use it as a resource when they need an expert,” said Wessel. “Especially if some people need to be convinced to do something.”
Ms. Yellen will also have a responsibility to be the most senior economic diplomat in the United States at a time of global tensions. Yellen will have to try to repair US economic relations around the world, including with allies such as Canada, Mexico and the European Union, which have become strained under President Donald J. Trump.
These relations will be critical due to the Biden government’s plan to try to combat what Yellen called China’s “illegal, unfair and abusive” economic practices by calling on allies to put pressure on Beijing.
At her confirmation hearing, Ms. Yellen said that China was “engaged in practices that give it an unfair technological advantage” and said the government was prepared to use America’s “full range of tools” to deal with this. One of his first challenges will be to review the trade agreement that Trump struck with Beijing, including China’s failure to meet its commitments, and determine whether the United States should maintain tariffs on $ 360 billion in Chinese products.
In the long run, Ms. Yellen plans to help carry out Biden’s tax proposals, which include a higher corporate tax and tax increases for the wealthy.
Ms. Yellen plans to bring other major changes to the Treasury Department’s mission, including using her powers to help assess the economic risks of climate change and create incentives to support clean energy technologies. It will also be focused on promoting policies that reduce racial inequality.
“It is the Treasury Secretary’s responsibility to strengthen the US economy, foster widespread economic prosperity and promote an economic agenda that will lead to long-term economic growth,” said Yellen in a written response to lawmakers released on Thursday.
Ms. Yellen will be under pressure to quickly form a Treasury department that has been depleted under her predecessor, Steven Mnuchin. Her deputy, Wally Adeyemo, will require confirmation from the Senate and Ms. Yellen will need to select secretaries to be in charge of international affairs, sanctions and domestic finances.
Earlier this month, the Treasury Department announced a chief of staff, Didem Nisanci, and a team of senior advisers, many of whom served in the Obama administration, to work with Yellen. On Monday, the Treasury announced another list of signings, including the appointment of Mark J. Mazur, a former senior Treasury official during the Obama administration, as assistant deputy secretary of tax policy at the office of legislative affairs.
Emily Cochrane contributed reports.