Treasury Secretary nominee Janet Yellen said at her confirmation hearing Tuesday that it’s important to “act big” on coronavirus relief, championing President-elect Joe Biden’s $1.9 trillion proposal.
“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen said during the hearing before the Senate Finance Committee. “But right 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 been struggling for a very long time.”
Biden’s proposal, unveiled last week, includes $1,400 stimulus checks, enhanced unemployment benefits, funding to facilitate the quick vaccination of Americans and aid to state and local governments.
Congressional Republicans, and some centrist Democrats, have expressed concerns about the effect of large amounts of federal spending on the national debt, which could potentially pose a challenge to Biden enacting his plan.
However, Yellen said on Tuesday that economists agree the federal government needs to enact more coronavirus relief.
“Economists don’t always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now — and longer-term scarring of the economy later,” she said.
Yellen also spoke about a desire to address economic inequality. Many economists and policymakers are concerned about a “K-shaped recovery” in which high-income people recover faster from the coronavirus downturn than low-income people.
“People worry about a K-shaped recovery, but well before COVID-19 infected a single American, we were living in a K-shaped economy, one where wealth built upon wealth while working families fell farther and farther behind,” she said. “This is especially true for people of color.”
Yellen also said that Treasury would have a “dual mission” of helping Americans manage during the pandemic and rebuilding the economy so that “it creates more prosperity for more people.”
Sen. Ron Wyden (D-Ore.), the incoming Finance Committee chairman, praised Yellen’s qualifications as well as her belief that going too small on coronavirus relief would be a “big mistake.”
The outgoing chairman, Sen. Chuck Grassley (R-Iowa), said it’s important to focus on coronavirus relief and said that now is not the time to enact “liberal structural economic reforms.”
–Updated at 11:13 a.m.