Incoming Treasury chief Yellen readies big changes
WASHINGTON » Janet Yellen, President-elect Joe Biden’s nominee for Treasury secretary, will tell lawmakers at her confirmation hearing today that the United States needs a robust set of fiscal stimulus measures to get the pandemic-stricken economy back on track and that now is not the time to worry about the nation’s mounting debt burden.
Yellen’s support for a large stimulus package comes as Biden prepares to push through a $1.9 trillion relief plan once he assumes the presidency. If confirmed, Yellen will be responsible for helping to shepherd that package through Congress and to oversee carrying it out.
“Neither the Presidentelect,
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 say, according to a copy of her opening remarks, which were reviewed by The New York Times.
It will not be an easy task. Democrats hold a slim majority in Congress and Republicans have already expressed concern about Biden’s plan and its impact on the budget deficit, which topped $3 trillion last year.
Yellen, a former Federal Reserve chair, will argue that “the benefits will far outweigh the costs.” And she will portray her job as having two mandates: helping people to stay afloat until the pandemic is over and rebuilding the economy so that
Americans can better compete in a globalized world.
If confirmed, Yellen is expected to bring a very different perspective to the job than her predecessor, Treasury Secretary Steven Mnuchin. That includes Yellen’s
approach to financial regulation and protecting the economy against systemic risks.
Two years ago, Yellen cosigned a letter to Mnuchin urging him not to move forward with plans to relax oversight of big financial firms, warning that doing so could threaten the stability of America’s financial system.
The plea by Yellen, who was joined by Ben Bernanke, another former Fed chair, and former Treasury secretaries Jacob J. Lew and Timothy F. Geithner, went unheeded. Under Mnuchin’s direction, the Financial Stability Oversight Council pressed ahead with plans to stop designating large, nonbank financial institutions like insurers and asset managers as a threat to the financial system, chipping away at a key pillar of the post-financial crisis regulatory era.
Now Yellen is poised to restore some of the Trump administration’s regulatory rollbacks if she wins Senate confirmation.
Her confirmation hearing before the Senate Finance Committee today is expected to focus largely on Yellen’s plans to revive a pandemic-stricken economy. But she will also be under pressure to show Democrats and progressive groups that she is ready to end what they view as Mnuchin’s coddling of Wall Street.
In recent weeks, Yellen and Wally Adeyemo, Biden’s nominee for Treasury’s deputy secretary, have been on a virtual listening tour of industry groups across Washington. According to people who participated in those sessions, the two have emphasized the need to create “equitable growth,” using the tools of the Treasury Department to combat climate change and rebuild regulatory institutions like the FSOC.