Yellen says it's important to 'act big' on coronavirus relief

Yellen says it's important to 'act big' on coronavirus relief
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Treasury Secretary nominee Janet YellenJanet Louise YellenOn The Money: Yellen to Congress: Raise the debt ceiling or risk 'irreparable harm' | Frustration builds as infrastructure talks drag Yellen to Congress: Raise the debt ceiling or risk 'irreparable harm' Africa doesn't deserve last place in the vaccine race MORE said at her confirmation hearing Tuesday that it’s important to “act big” on coronavirus relief, championing President-elect Joe BidenJoe BidenTrump hails Arizona Senate for audit at Phoenix rally, slams governor Republicans focus tax hike opposition on capital gains change Biden on hecklers: 'This is not a Trump rally. Let 'em holler' MORE’s $1.9 trillion proposal.

“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen said during the hearing before the Senate Finance Committee. “But right now, with interest rates at historic lows, the smartest thing we can do is act big. 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.”

Biden’s proposal, unveiled last week, includes $1,400 stimulus checks, enhanced unemployment benefits, funding to facilitate the quick vaccination of Americans and aid to state and local governments.

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Congressional Republicans, and some centrist Democrats, have expressed concerns about the effect of large amounts of federal spending on the national debt, which could potentially pose a challenge to Biden enacting his plan.

However, Yellen said on Tuesday that economists agree the federal government needs to enact more coronavirus relief.

“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 longer-term scarring of the economy later,” she said.

Yellen also spoke about a desire to address economic inequality. Many economists and policymakers are concerned about a “K-shaped recovery” in which high-income people recover faster from the coronavirus downturn than low-income people.

“People worry about a K-shaped recovery, but well before COVID-19 infected a single American, we were living in a K-shaped economy, one where wealth built upon wealth while working families fell farther and farther behind,” she said. “This is especially true for people of color.”

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Yellen also said that Treasury would have a “dual mission” of helping Americans manage during the pandemic and rebuilding the economy so that “it creates more prosperity for more people.”

Sen. Ron WydenRonald (Ron) Lee WydenRepublicans focus tax hike opposition on capital gains change GOP, business groups snipe at Biden restaurant remarks On The Money: Senate braces for nasty debt ceiling fight | Democrats pushing for changes to bipartisan deal | Housing prices hit new high in June MORE (D-Ore.), the incoming Finance Committee chairman, praised Yellen’s qualifications as well as her belief that going too small on coronavirus relief would be a “big mistake.”

The outgoing chairman, Sen. Chuck GrassleyChuck GrassleyThe Hill's Morning Report - Pelosi considers adding GOP voices to Jan. 6 panel Ex-Rep. Abby Finkenauer running for Senate in Iowa Six takeaways: What the FEC reports tell us about the midterm elections MORE (R-Iowa), said it’s important to focus on coronavirus relief and said that now is not the time to enact “liberal structural economic reforms.”

--Updated at 11:13 a.m.