President-elect Joe Biden’s choice as US Treasury secretary has urged Congress to “act big” and ignore surging national debt in the face of the continuing coronavirus crisis.
Janet Yellen, the former chair of the US central bank, made her remarks at a Senate finance committee hearing to confirm her appointment as the Trump administration nears its end.
She told lawmakers that the incoming administration would focus on winning quick passage of its $1.9trn pandemic relief plan, which is to be funded by borrowing, on top of the near $3trn in support delivered during the crisis to date.
Republicans on the committee argue the package, which includes sending cheques of $1,400 (£1,030) to individual Americans earning less than $75,000 annually, is too big given the size of the US budget deficit.
That hit a record $3.1trn last year with US national debt standing at $27trn (£19.8trn).
Critics also pointed to fears that the package of measures, which need the approval of Congress, would also include Mr Biden’s plan for a $15-per-hour minimum wage.
Ms Yellen dismissed suggestions the wage proposal could spark a wave of redundancies, saying she expected little to no effect.
She added that many of the lowest-paid had done the most to keep the country’s supply chain functioning during the COVID-19 pandemic.
On the broader issue of financial support for consumers and businesses she said: “More must be done.
“Without further action, we risk a longer, more painful recession now and long-term scarring of the economy later.”
She said of budget concerns: “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.”
Ms Yellen, set to be the first woman to become Treasury secretary, is expected to win confirmation of her appointment on Thursday following a vote in the Democrat-controlled Senate.
In financial disclosure forms filed with the committee ahead of Tuesday’s hearing, she listed more than $7m in speaking fees she had received from several Wall Street firms including Goldman Sachs and Citigroup since leaving the Federal Reserve two years ago.
Ms Yellen has agreed to recuse herself from Treasury matters involving firms that have paid her for talks.
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