Biden is making good on his diversity pledge, tapping women and minorities for senior US economic roles.
The United States Senate Committee on Finance has begun its confirmation hearing for Treasury Secretary nominee Janet Yellen with Democrats and Republicans squaring off immediately over how much more support the economy, hammered during the pandemic, requires.
Senator Ron Wyden, a Democrat from Oregon, who is scheduled to take over as chairman of the committee, told Yellen that his top priority is avoiding the mistake made a decade ago when Congress withdrew support for the economy too soon after the housing crisis and delayed the recovery from the last recession.
Wyden said he hoped that the Senate will be able to get Yellen’s nomination approved “as quickly as possible” given the challenges facing the country.
But Republican Senator Chuck Grassley pointed to all the support that has already been approved and said he was concerned that the incoming administration of President-elect Joe Biden wants to raise taxes and enact massive spending programmes.
In her testimony, Yellen called on Congress to do more to help the US’s virus-ravaged economy, saying 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.
Yellen, who will be the first female treasury secretary in the nation’s history, is expected to have little trouble winning approval in a Senate that will be narrowly controlled by Democrats once two Democratic senators from Georgia are seated.
In her testimony, Yellen, who was previously the country’s first female chair of the Federal Reserve, said that the quick action Congress took by passing trillion-dollar rescue packages last spring and an additional $900bn relief measure last month were successful in “averting a lot of suffering”.
But 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 more support would also be needed to keep unemployment benefit cheques going out and to help families who are going hungry or in danger of being homeless.
Biden last week unveiled a $1.9 trillion relief plan that would provide more aid to American 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 that she and Biden were aware of the country’s 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 Senate Committee on Finance hearing with Yellen on Tuesday is one of several that the Senate will be holding as the incoming Biden administration tries to get its top Cabinet officials in office quickly.