Yellen urges Congress to "act responsibly" to support the US economy

US President-elect Joe Biden's candidate for Treasury Secretary Janet Yellen urged lawmakers Tuesday to support a massive aid package for the country's economy struck by the Covid-19 pandemic, according to prepared statements seen by AFP. Press

Biden, who will take office on Wednesday, has proposed a $ 1.9 trillion rescue package to help businesses and families grapple with the pandemic, and Yellen will be tasked with passing this massive bill through Congress as some worry about rising budget deficits.

"Neither the president-elect, nor me, we're proposing this exemption package without estimating the country's debt burden," Yellen will tell the Senate Finance Committee at its confirmation session.

"But at the moment, with interest rates dropping to their lowest levels in history, the smartest thing we can do is act responsibly," she added.

If Congress confirms her appointment, Yellen will become the first Chancellor of the Exchequer, who was also the first woman to chair the Federal Reserve. She will take over the job at a time when the world's largest economy is trying to rebound after the pandemic that has caused tens of millions of workers to be laid off and severely curtailed economic growth.

She will also be one of the few Treasury Ministers with a background in economics and politics, rather than previously working only at one of the investment banks on Wall Street.

Two previous aid bills passed by Congress helped keep the country from the worst deflation by offering loans and grants to small businesses and expanding unemployment aid.

But this also caused a doubling of the deficit in fiscal year 2020, which jumped more than 200 percent to an all-time high of $ 3.1 trillion, more than double the previous record.

While some sectors saw a steady recovery, there is evidence that the temporary recovery is slowing, with weekly Labor Department data showing the increasing pace of layoffs and the economy losing jobs in December.

Economists also fear the pandemic will exacerbate inequality in the United States.

Many professional workers were able to continue their work by working from home, but the service sectors witnessed mass layoffs of workers and employees to stop the spread of infection.

"People are worried about the recovery (...), but long before the Covid-19 virus hit one American, we were living in an economy in which wealth was built on wealth while working families declined further and further," Yellen said.

"This is especially true for individuals of color," she explained.

 

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