Yellen Calls for More Aid to Avoid Longer, More Painful Recession
January 18 2021 - 4:20PM
Dow Jones News
By Kate Davidson
WASHINGTON -- Janet Yellen, President-elect Joe Biden's choice
for Treasury secretary, plans to tell lawmakers that the U.S. risks
a longer, more painful recession unless Congress approves more aid
and urge them to "act big" to shore up the recovery.
Ms. Yellen is set to testify Tuesday before the Senate Finance
Committee, which is considering her nomination, according to a copy
of her prepared remarks that was viewed by The Wall Street
Journal.
"Economists don't always agree, but I think there is a consensus
now: Without further action, we risk a longer, more painful
recession now -- and long-term scarring of the economy later," Ms.
Yellen will say. "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."
Mr. Biden's nomination of Ms. Yellen positions the 74-year-old
labor economist to lead his administration's efforts to advance the
recovery from the destruction caused by the coronavirus pandemic
and related shutdowns. She will also play a key role in pushing the
administration's economic agenda on Capitol Hill, a job that will
start in earnest Tuesday, said Tony Fratto, a senior Treasury and
White House aide in the George W. Bush administration.
Mr. Biden's $1.9 trillion coronavirus relief package, unveiled
last week, provides for another round of direct stimulus payments,
extended and enhanced jobless benefits, funding for schools and
first responders and the creation of a nationwide vaccination
program. It also includes longstanding Democratic priorities, such
as raising the federal minimum wage to $15 an hour and expanding
paid leave for workers.
Republicans have decried the size and scope of the measure,
arguing it would spend more than the economy needs. Some
Republicans and Democrats have also expressed concern about the
growing national debt, which at $21.6 trillion exceeds the annual
output of the U.S. economy.
Ms. Yellen aims to address those concerns in her testimony:
"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."
The hearing comes at a time of growing uncertainty over the
progress of the pandemic, which has killed close to 400,000 people
in the U.S., as well as the state of the economy. Retail sales fell
for the third straight month in December and employers cut jobs,
ending seven months of employment gains.
Write to Kate Davidson at kate.davidson@wsj.com
(END) Dow Jones Newswires
January 18, 2021 16:05 ET (21:05 GMT)
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