Janet Yellen, President Joe Biden's pick as Treasury Secretary, told the Senate Finance Committee on Jan. 19 she "will be focused from Day 1 on providing support to America's workers and to small businesses," adding that, for now, spurring growth is more important than improving the U.S. fiscal outlook.
Yellen — who if confirmed by the Senate would become the Biden Administration's chief economic policy spokeswoman — said the president wants to amend, rather than repeal, the 2017 tax law by eliminating some benefits to large companies and the highest-income taxpayers.
She said the most potent policies for economic revival would aid the neediest workers and small and mid-sized businesses (SMBs), singling out the Paycheck Protection Program (PPP), the Supplemental Nutrition Assistance Program, the State Small Business Credit Initiative and extended unemployment insurance.
President Biden's $1.9 trillion economic relief proposal has drawn fire from some of the same Republicans who opposed aspects of prior pandemic-related aid packages totaling more than $4 trillion. They especially resist provisions that would provide $350 billion in state and local aid and increase the hourly minimum wage to $15.
"We're looking at another spending blowout," Sen. Pat Toomey, R-PA, said at Yellen's confirmation hearing. "The only organizing principle that I can discern is that it seems to spend as much money as possible, seemingly for the sake of spending it."
In contrast, the U.S. Chamber of Commerce, which usually favors GOP policies, welcomes the Biden proposal for its "focus on vaccinations and on economic sectors and families that continue to suffer as the pandemic rages on."
Yellen also underscored the need to help families hit hardest by the pandemic, saying such aid preempted any effort to raise taxes and address concerns about U.S. fiscal imbalances.
"The focus right now is on providing relief and on helping families keep a roof over their head and food on the table, and not on raising taxes," said Yellen, a former chair of the Federal Reserve. "But over the long term, I would agree with you that the long-term fiscal trajectory is a cause for concern" that will eventually need to be addressed, she said in a response to a question from Sen. John Thune, R-S.D.
Yellen warned that inadequate federal aid could slow the recovery and lead to permanent company failures and job loss. She repeatedly called on lawmakers to support small businesses, which she described as vital to job creation and the well-being of low- and moderate-income communities.
"This is a very high priority objective," Yellen said.
The largest corporations "have access to capital markets and have not had trouble raising money," she said. "We have a heavy focus on small businesses."
Yellen said she favors investment in workforce training, infrastructure, and research and development, and sees a need to eventually reverse provisions in the 2017 tax law that create incentives for companies to move operations and profits offshore.
Yellen also expressed interest in considering whether to introduce a 50-year Treasury bond.
"There is an advantage to funding the debt, especially when interest rates are very low, by issuing long-term debt," she said. "I would be very pleased to take a look at this issue."
Sen. Ron Wyden, D-OR, the incoming committee chairman, said he hopes the Senate will vote on Yellen's nomination on Jan. 21.