U.S. must ‘act big’ on next coronavirus relief package, says Yellen

Monitoring Desk

WASHINGTON (Reuters) – Janet Yellen, U.S. President-elect Joe Biden’s nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday that the government must “act big” with its next coronavirus relief package.

Biden, who will be sworn into office on Wednesday, outlined a $1.9 trillion stimulus package proposal last week, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the virus under control.

“Neither the president-elect, 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, a former Federal Reserve chair, said in a prepared opening statement for her hearing before the committee.

“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,” she said in the statement, which was obtained by Reuters.

The proposed aid package includes $415 billion to bolster the U.S. response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.

Many Americans would receive stimulus payments of $1,400, which would be on top of the $600 checks approved in a pandemic relief bill passed by Congress last month. Supplemental unemployment insurance would also increase to $400 a week from the current $300 a week, and it would be extended to September.

In her prepared testimony, Yellen also says the U.S. economy must be rebuilt “so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy.”

Senator Ron Wyden, a Democrat who is set to take over as chairman of the committee soon after Biden and Vice President-elect Kamala Harris are sworn in on Wednesday, said in a statement that “nobody is better qualified than Secretary-Designate Yellen to lead an economic recovery.”

Wyden added that the hearing on Tuesday “will provide a great opportunity to hear about what worked and what didn’t during the Great Recession, and what we need to do to get this economy back on track.”

Yellen will replace Treasury Secretary Steven Mnuchin if confirmed by the Senate. Mnuchin will step down on Wednesday.

A Biden ally said Yellen’s confirmation is expected to be among the least controversial of Biden’s picks to fill key roles in his administration, but that she would still be likely to face questions over his tax and spending proposals.

Courtesy: Reuters