Yellen to Lawmakers: ‘Act Big’ on Pandemic Relief Now

FOMC Chair Janet Yellen delivers the opening statement during the FOMC press conference, March 15, 2017. Image courtesy US Federal Reserve.

Smith Collection/Gado/Getty Images

Janet Yellen, President-elect Joe Biden’s nominee for Treasury secretary, called for a “big” government response to help rebuild the U.S. economy from its sharpest downturn in history.

Yellen, a former chair of the Federal Reserve Board with plenty of government experience, voiced her support for Biden’s $1.9 trillion pandemic relief package Tuesday in a Senate Finance Committee hearing to consider her nomination. Without a new relief bill, Yellen said the economy is at risk of a more painful recession now and long-term damage in the future.

“Right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen said. “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.”

Yellen used Tuesday’s hearing to outline the administration’s dual mission of helping the economy through the pandemic’s final months alongside a longer-term goal of reducing inequality. She said that well before the pandemic hit, the economy was “one where wealth built on wealth while working families fell further and further behind,” especially for people of color. 

“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 economy,” Yellen said.

If confirmed, Yellen, 74, will be a key figure in the Biden administration’s economic team. As Treasury secretary, replacing Steve Mnuchin, Yellen would advise on economic and monetary policy at a crucial time for the economy, when the government is attempting to fight the COVID-19 pandemic with vaccines, while also dealing with a persistent unemployment crisis.