Janet Yellen, president-elect Joe Biden’s nominee to be the next Secretary of the Treasury, on Tuesday told lawmakers that the United States needs to “act big” with an economic stimulus package to address the impact on Americans from the COVID-19 pandemic, which has shut down businesses across the country.
Yellen also told senators during her confirmation hearing that now is not the time to fret over the nation’s soaring debt.
“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” said Yellen. “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.”
“Economists don’t always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later,” Yellen said.
After Yellen’s prepared comments were released, the Dow Jones Industrial Average rose 220 points, or 0.7%. The S&P 500 futures gained 0.7%, while the Nasdaq Composite jumped 0.9%, CNBC reported.
Yellen also told lawmakers it’s time to reopen schools.
“Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job,” Yellen said. “We’ll need more funding to make sure unemployment insurance checks still go out; and to help families who are at risk of going hungry or losing the roof over their heads.”
Last week, Biden proposed a $1.9 trillion “American Rescue Plan,” which includes extending enhanced unemployment benefits through September 2021 and increasing those benefits from the current $300 a week to $400 a week. In addition, his proposal calls for direct relief to Americans in the form of $1,400 checks.
Shortly before Christmas, the House voted 275-134 vote, with 44 Republicans voting in favor, to pass a bill to provide $2,000 to Americans. Americans earning up to $75,000 would have received direct payments of $2,000, an increase from the $600 checks in the coronavirus relief package approved by both houses of Congress and signed into law by President Donald Trump.
But Senate Majority Leader Mitch McConnell (R-KY) refused to call up the bill for a Senate vote and instead introduced his own bill that included two poison pills Democrats are sure to hate. His legislation called for the repeal of Section 230, which grants liability protection to social media giants such as Facebook and Twitter, and called for the creation of the Election Assistance Commission, a congressional committee to investigate the integrity of U.S. elections.
That bill went nowhere as Senate Minority Leader Chuck Schumer (D-NY) called McConnell’s proposal a “cynical gambit.”
But at least four Republicans expressed support for the $2,000 bill, including Sen. Marco Rubio (R-FL), who said, “I agree with the President that millions of working-class families are in dire need of additional relief, which is why I support $2,000 in direct payments to Americans struggling due to the pandemic.”
Related: GOP Senate Leader Introduces His Own Bill On $2,000 Stimulus Checks — With Two Poison Pills