Yellen Urges Congress To ‘Act Big’ To Prop Up Pandemic-Scarred Economy

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Former Federal Reserve Chair Janet Yellen appears for a TV interview on Aug. 14, 2019, in Washington. Yellen, now President-elect Joe Biden’s pick to lead the Treasury Department, urged Congress on Tuesday to «act big in helping the struggling economy.

Andrew Harnik/AP

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Andrew Harnik/AP

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Democrats argue that the government was too quick to withdraw support for the economy during the Global Financial Crisis, saying it contributed to a slow recovery. But committee Republicans expressed doubts about some parts of the Biden proposal, which includes a $15 minimum wage and substantial aid to state and local governments.

«Now is not the time to enact a laundry list of liberal, structural economic reforms, said Sen. Chuck Grassley, R-Iowa, the committee’s chairman.

GOP critics also expressed concern about adding to the federal debt.

Yellen agreed that fiscal responsibility is an important, long-term goal. But she argued that with interest rates at historic lows, it would be a mistake for the federal government to pinch pennies at a time when COVID-19 is killing thousands of Americans every day.

«The most important thing, in my view, that we can do today to put us on the path to fiscal sustainability is to defeat the pandemic, Yellen said.

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She argued that government spending is necessary not only to provide immediate help to struggling families and small businesses, but also to fund investments in infrastructure, research and worker training, in an effort to promote more equitable growth over the long term.

«Well before COVID-19 infected a single American, we were living in a K-shaped economy — where wealth built upon wealth while working families fell farther and farther behind, Yellen said. «This was especially true for people of color.