US president-elect Joe Biden’s nominee for US secretary of the treasury Janet Yellen is calling on the US Congress to do more to fight a deep recession induced by the COVID-19 pandemic, saying that the threats of a longer and even worse downturn are too great to cut back on support now.
“Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later,” Yellen said in testimony prepared for her confirmation hearing yesterday before the US Senate Committee on Finance.
Yellen, who is to be the first female treasury secretary in the nation’s history, is expected to have little trouble winning approval in a Senate that is to be narrowly controlled by Democrats once two Democratic senators from Georgia are seated.
Photo: Reuters
In her testimony, Yellen, who was also the first female chair of the US Federal Reserve, said that the quick action Congress took by passing trillion-dollar rescue packages last spring and an additional US$900 billion relief measure last month were successful in “averting a lot of suffering.”
However, she said that even with the extraordinary government help, the pandemic has still caused “widespread devastation.”
“Eighteen million unemployment insurance claims are being paid every week. Food bank shelves are going empty. The damage has been sweeping and as the president-elect said last Thursday, our response must be too,” Yellen said.
“Over the next few months, we are going to need more aid to distribute the vaccine, to reopen schools, to help states keep firefighters and teachers on the job,” Yellen said.
She said that more support would also be needed to continue sending unemployment benefit checks out and to help families who are going hungry or in danger of being homeless.
Biden last week unveiled a US$1.9 trillion relief plan that would provide more aid to families, businesses and local communities, and provide more support for vaccine production and distribution.
While Democrats have endorsed the effort, many Republican lawmakers have expressed concerns about the price tag given soaring federal budget deficits.
Yellen said she and Biden are aware of the US’ rising debt burden.
“But right now, with interest rates at historic lows, the smartest thing we can do is act big,” she said. “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.”
The committee hearing with Yellen is one of several that the Senate is to be holding as the incoming Biden administration tries to get its top Cabinet officials in office quickly.
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