Janet Yellen to tell confirmation hearing that US should ‘act big’

Financial Times

Janet Yellen, the former Fed chair, is scheduled to appear before the Senate finance committee on Tuesday © REUTERS

Treasury nominee says with rates low, lawmakers should spend now and worry about deficits later

Janet Yellen will lay out the case for President-elect Joe Biden’s proposed $1.9tn relief package at her confirmation hearing as Treasury secretary on Tuesday, arguing that «the smartest thing we can do is act big». In prepared remarks obtained by the Financial Times ahead of her appearance before the Senate finance committee, Ms Yellen said the US risked «a longer, more painful recession» and «long-term scarring» if it did not move quickly to inject more government spending into the economy.

«We have to rebuild our economy so that it creates more prosperity for more people.» 
Janet Yellen

Ms Yellen’s comments will reinforce Mr Biden’s push for $1.9tn in relief measures, which he outlined last week and wants Congress to pass urgently after his inauguration on Wednesday. Mr Biden’s plan includes aid to states, direct cheques to individuals, an extension of jobless benefits, a boost to the child tax credit, and funding for the coronavirus response. « This is especially true for people of colour,» Ms Yellen said. «We have to rebuild our economy so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy,» she added.

Although the $1.9tn relief package is the immediate priority, Mr Biden’s team is also preparing a second multibillion-dollar recovery plan that would plough government funds into infrastructure, green energy, healthcare and education, at least partially funded by higher taxes on the wealthy and corporations. Several senior Republicans have already criticised aspects of Mr Biden’s fiscal plan, but others have held their fire, suggesting there could be an opening for compromise. «I’d welcome it in the Senate».

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Source: James Politi | Financial Times

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