Yellen backs Biden’s $1.9T aid plan

WASHINGTON — Treasury Secretary Janet Yellen said Sunday the country was still in a “deep hole” with millions of lost jobs but that President Joe Biden’s $1.9 trillion relief plan could generate enough growth to restore full employment by next year.

Republican senators argued that Biden’s proposal was too expensive and they cited criticism from Larry Summers, a treasury secretary under President Bill Clinton, that passage of the measure could run the risk of triggering runaway inflation. Summers also contended that Biden’s plan would make less money available for other initiatives such as improving the nation’s infrastructure.

Yellen, a former Federal Reserve chair who is the first woman to lead the Treasury Department, said the central bank had the tools to handle any potential inflationary threat. She said the urgent need now was to deal with the problems raised by the pandemic-induced recession: as joblessness, lost small businesses and reopening schools.

“We’re in a deep hole with respect to the job market and a long way to dig out,” Yellen said.