WASHINGTON – Treasury Secretary Janet Yellen said Sunday the country was still in a “deep hole” with millions of lost jobs but that President Joe Biden’s $1.9 trillion relief plan could generate enough growth to restore full employment by next year.
Republican senators argued that Biden’s proposal was too expensive and they cited criticism from Larry Summers, a treasury secretary under President Bill Clinton, that passage of the measure could run the risk of triggering runaway inflation. Summers also contended that Biden’s plan would make less money available for other initiatives such as improving the nation’s infrastructure.
Yellen, a former Federal Reserve chair who is the first woman to lead the Treasury Department, said the central bank had the tools to handle any potential inflationary threat. She said the urgent need now is to deal with the problems raised by the pandemic-induced recession: joblessness, lost small businesses and reopening schools.
“We face a huge economic challenge here and tremendous suffering in the country. We have got to address that,” Yellen said. “That’s the biggest risk.”
The House and Senate this past week approved the legislation necessary to pass Biden’s package through a process known as reconciliation, which only requires 51 votes in the Senate. The Senate is split 50-50, with Vice President Kamala Harris the tiebreaking vote.
House Speaker Nancy Pelosi, D-Calif., has said she said she hopes to approve the specific budget details of the Biden proposal over the next two weeks, aiming to get the measure through Congress before current unemployment benefits run out in mid-March.
House Democrats plan to propose boosting the child tax credit, now at a maximum of $2,000, to as much as $3,600 per child annually, according to information obtained Sunday by The Associated Press. The proposal will be part of the COVID-19 relief bill they are writing that is expected to largely follow Biden’s plan.
The House Ways and Means Committee has jurisdiction over about half of Biden’s $1.9 trillion proposal, including support for workers, the jobless and people’s health care costs. The committee’s Democrats were expected to release their full plan Monday.