Janet Yellen won confirmation to become US secretary of the treasury, building out US President Joe Biden’s team as the administration struggles to win bipartisan support for a US$1.9 trillion COVID-19 relief plan for shoring up a weakening economic recovery.
The first woman to serve in the post, Yellen takes charge of a department with responsibilities spanning tax policy and government spending to financial stability, economic sanctions and foreign-exchange policy.
She also oversees ties with the US Federal Reserve, which she previously chaired. She was confirmed by the US Senate 84-15 on Monday evening.
Photo: Reuters
Yellen already saw the uphill fight the administration faces in its stimulus campaign last week, with Republicans on the Senate Finance Committee rejecting her arguments that historically low interest rates offer an opportunity for expansive deficit spending.
White House economic adviser Brian Deese similarly ran into challenges from a bipartisan group of lawmakers on Sunday, who asked for the basis for such a large package so soon after last month’s US$900 billion bill.
Yellen is relatively new to a political sales role, after having mainly defended and explained Fed actions during her previous career.
However, she brings a wealth of economic knowledge to the administration’s case.
The 74-year-old was also the first woman to head the US central bank, which she left in early 2018 after overseeing a winding back of monetary stimulus after the last recession and its slow recovery.
“The symbolism and sense of technical expertise and decades of Washington experience that Janet Yellen brings will bring immediate credibility” to Biden’s economic agenda, said Tim Adams, who served as a US Department of the Treasury undersecretary during the administration of former US president George W. Bush and now heads the Institute of International Finance, a banking group. “Yellen will be a key anchor of the economic team.”
Yellen has been a trailblazer throughout her career: She was the only woman out of 24 students in 1971 to earn a doctorate in economics from Yale University.
She later taught economics at Harvard University, and worked for more than 16 years at the Fed, including a stint as president of the Federal Reserve Bank of San Francisco during the global financial crisis.
Brooklyn, New York-born Yellen follows former US president Jimmy Carter appointee William Miller, who also served as treasury secretary after being Fed chair.
She will be the first to have had both those jobs and head of the White House Council of Economic Advisers, a role she had during the administration of former US president Bill Clinton.
She had an early look at the challenges of the new job in her confirmation hearing at the Senate panel last week.
Her argument that it is critical to “act big” now with emergency deficit spending to avoid long-term “scarring” in the economy was rejected by Republican lawmakers voicing concerns about rising debt.
“Right now, short-term, I feel that we can afford what it takes to get the economy back on its feet, to get us through the pandemic,” Yellen told the committee.
She highlighted the opportunity presented by historically low interest rates, and flagged that debt-servicing payments as a share of the economy are lower today than before the 2008 financial crisis.
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