Finance

Yellen says Biden’s COVID-19 relief bill ‘acted like a vaccine for the American economy’

Treasury Secretary Janet Yellen speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing to discuss oversight of the CARES Act within the Federal Reserve and Department of Treasury on Tuesday, September 28, 2021.
Greg Nash

Treasury Secretary Janet Yellen on Wednesday said the coronavirus relief bill signed into law in March “acted like a vaccine for the American economy” in some ways, pointing to safeguarding the financial system from new variants.

In remarks at the U.S. Conference of Mayors in Washington, D.C., Yellen said that while protection from the relief package, dubbed the American Rescue Plan, was not “complete,” it was “very strong.”

“In some ways, the [American Rescue Plan] acted like a vaccine for the American economy, protecting our recovery from the possibility of new variants,” Yellen said.

“The protection wasn’t complete, but it was very strong — and it prevented communities from suffering the most severe economic effects of Omicron and Delta,” she added.

Biden signed the $1.9 trillion COVID-19 relief package into law less than two months into his presidency, at a time when coronavirus infections in the U.S. were on the decline following a winter surge. No Republicans in the House or Senate voted for the bill.

The legislation includes funding to bolster vaccine distribution, school reopenings and enhanced unemployment benefits. It also included capital for $1,400 direct payments to most Americans and extended the child tax credit, among other provisions.

Yellen’s comments come as the U.S. economy is experiencing a host of difficulties, including high inflation, supply chain snarls and disappointing jobs numbers.

Inflation hit its highest level since 1982 in the year ending in December, with consumer prices increasing by 7 percent.

Yellen on Wednesday said the American Rescue Plan “proved absolutely essential,” claiming “you can draw a straight line between the [American Rescue Plan’s] passage and our economic performance during Delta and Omicron.”

She said funding from the package “quickly and completely … changed the everyday institutions that keep our society working.”

The Treasury secretary noted, however, that “the job of fully implementing the [act] is not done yet,” emphasizing that her team is prepared to continue working with mayors on projects regarding affordable housing, rehiring educators and broadband internet.

Tags American Rescue Plan COVID-19 pandemic economy Janet Yellen

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