By Kate Davidson
WASHINGTON -- Janet Yellen told lawmakers Tuesday she would make
the needs of America's workers her core focus if confirmed as the
next U.S. Treasury secretary and ensure the U.S. has a competitive
economy that offers good jobs and wages workers in cities and rural
"I will be focused on day one on providing support to America's
workers and to small businesses, putting into effect as quickly and
efficiently as I can, the relief in the bill that was recently
passed, and then over time working for a second package that I
think we need to get through these dark times before the
vaccination program enables us to go back to life as we knew it,"
she told the Senate Finance Committee at her confirmation hearing
before a vote on her nomination.
In her earlier prepared remarks, Ms. Yellen urged lawmakers to
"act big" to avert a protracted economic downturn and put aside
concerns about the mounting national debt.
"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 says in the text of remarks to the Senate Finance Committee
as reviewed by The Wall Street Journal.
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. The proposal 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."
Mr. Biden's advisers have argued that the low cost of borrowing
and weak economy call for larger short-term deficits to shore up
the recovery. But it isn't clear how much of their broader agenda
-- which includes investments in infrastructure, health care and
green energy -- they intend to finance through borrowing and how
much they would offset with new revenue, such as tax increases on
In her remarks to senators Tuesday, Ms. Yellen will say that as
Treasury secretary, she would face a "dual mission." The first is
to see Americans through the pandemic. "But then there is the
longer-term project. We have to rebuild our economy so that it
creates more prosperity for more people and ensures that American
workers can compete in an increasingly competitive global
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 starts
in earnest Tuesday, said Tony Fratto, a senior Treasury and White
House aide in the George W. Bush administration.
"She's a known quantity in terms of testifying there, but I
think this is the first time she has had to go to really be
something of a salesman on policy before," Mr. Fratto said. "She's
the primary spokesperson now."
The Senate confirmation hearing is Ms. Yellen's fifth during her
three decades at the forefront of economic policy-making. If
confirmed, she will be the first woman to serve as Treasury
secretary and the first person to have led the Fed, the Treasury
and the White House Council of Economic Advisers.
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.
Ms. Yellen on Tuesday also is expected to affirm the U.S.'s
commitment to market-determined exchange rates. And she will make
clear the U.S. doesn't seek a weaker dollar for competitive
advantage, according to Biden transition officials familiar with
her hearing preparation.
Ms. Yellen will likely face questions about whether and when she
would agree to establish new emergency lending programs with the
Fed, should the economy need them.
Outgoing Treasury Secretary Steven Mnuchin and Fed Chairman
Jerome Powell set up several such programs during the early months
of the pandemic to keep credit flowing to small and midsize
businesses and states. But Mr. Mnuchin said he couldn't extend them
beyond their Dec. 31 expiration, drawing criticism from Democrats
who accused him of trying to hamstring the incoming
Republicans argued that the programs are no longer needed and
pushed to include language in the latest stimulus bill that
curtails the Fed and Treasury's ability to resurrect them. They
could press Ms. Yellen for her views on the Treasury's authority to
establish similar programs and the conditions under which she might
take such action.
As Treasury secretary, Ms. Yellen would chair the Financial
Stability Oversight Council, the panel of regulators charged with
monitoring risks in the financial system. Democrats and Republicans
may press her on whether the Treasury would incorporate climate
change into the broader financial regulatory framework and whether
she sees a more active role for the FSOC in the Biden
Ms. Yellen may face pressure from Democrats to reverse Mr.
Mnuchin's refusal to hand President Trump's tax returns to
Congress. Democrats may also press her on rules that limit states'
ability to help their residents avoid the cap on state and local
tax deductions. And they may ask about what they view as
company-favorable regulations on international taxes.
She also will pick up where the Trump administration left off on
international tax negotiations. Mr. Mnuchin has pushed back against
digital-service taxes imposed by France and other countries, which
the U.S. says discriminate against U.S. tech companies. Democrats
have broadly agreed with that stance. Ms. Yellen will take over
amid flailing multilateral negotiations over where corporate
profits should be taxed.
Write to Kate Davidson at firstname.lastname@example.org
(END) Dow Jones Newswires
January 19, 2021 11:38 ET (16:38 GMT)
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