Yellen to urge Congress to ‘act on US economy’

WASHINGTON: US President-elect Joe Biden’s nominee for Treasury secretary, Janet Yellen, will urge lawmakers to support big stimulus spending for the coronavirus-ravaged US economy, according to prepared remarks seen by AFP. Biden, who will take office today, has proposed a $1.9 trillion rescue package to help businesses and families struggling amid the pandemic, and Yellen would be tasked with getting that massive bill through a Congress where some are wary of the skyrocketing budget deficit.

“Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen will tell the Senate Finance Committee at her confirmation hearing. If confirmed by the chamber, Yellen would be the first-ever female Treasury secretary-after serving as the first woman to lead the Federal Reserve-and would take office as the world’s largest economy attempts to get back on its feet after COVID-19 caused tens of millions of layoffs and a sharp contraction in economic growth.

She also would be one of the few Treasury secretaries with a background is economics and policy, rather than a career at a Wall Street investment bank. Two previous pandemic relief bills passed by Congress have helped keep the country from a worse downturn by giving loans and grants to small businesses and expanding unemployment benefits, among other provisions. But those also caused an explosion in the deficit for the 2020 fiscal year, which jumped more than 200 percent to an all-time high of $3.1 trillion, more than twice the prior record. While some sectors have seen a steady rebound, there is evidence that the tentative recovery is flagging, with weekly Labor Department data showing the pace of layoffs increasing and the economy losing jobs in December. Economists also fear that the pandemic will exacerbate inequality in the United States. Many professional workers have managed to continue their employment by working from home, but service industries have seen mass layoffs as states imposed business restrictions to stop infections, disparities Yellen addresses in her remarks.—AFP