Janet Yellen’s trek to become the first female Treasury secretary in U.S. history moved smoothly through a critical Senate hearing Tuesday, with a come out for on her confirmation likely to happen before the end of the week.
An audience of mostly friendly legislators questioned Yellen across a mark of topics, from taxation to China to climate change.
In contrast to a highly contentious hearing four years ago for now-outgoing Secretary Steven Mnuchin, associates of the Senate Finance Committee mostly thanked Yellen for her willingness to serve.
A few peppered her with concerns over the land’s fiscal path and the Biden administration’s likelihood of raising taxes on wealthy Americans and corporations, though there were no mundane signs of resistance to Yellen’s nomination.
“No one could be better for this job,” Sen. Ron Wyden, D-Ore., said of the nominee. “Nobody merits more credit than Janet Yellen for the longest economic expansion that we have seen in our history that lasted until the pandemic hit.”
Wyden disclosed that a Yellen confirmation vote before the full Senate likely would happen Thursday.
Yellen proves to the Treasury most recently from the Brookings Institution, but her more well-known previous gig was as Federal Reserve chair, a attitude she held from 2014-18. President Donald Trump chose not to renominate her to the central bank leadership whereabouts, which she also was the first woman to hold.
The Senate got to hear a somewhat different version of Yellen, who assiduously had escaped commenting much on fiscal affairs or other doings on Capitol Hill while at the Fed. This time around, she was expert to voice her opinions on a variety of issues.
1. Higher taxes are coming, but not now
Yellen characterized President-elect Joe Biden being in favor of some tax escalations on wealthy Americans and corporations to fund an ambitious domestic agenda that includes pulling the country through the coronavirus pandemic and, in the final analysis, avoiding the “race to the bottom” among global economies when it comes to corporate taxes. The U.S. levy on profits was the highest in the exploited world before Trump’s 2017 tax cut package.
“The focus right now is on providing relief and helping families keep a roof during the course of their heads and food on the table and not raising taxes,” she said. With Biden’s spending plans “we need to deliberate on about taxes in the context of a package that aims to do those things,” Yellen said. “To the extent that resource is required for these very valuable investments, I believe it should come in a fair way.”
2. ‘Fiscal sanity,’ but also not now
Front multiple questions about the nation’s tattered finances, Yellen said there will come a time to talk hither debt and deficits, but not until the economy has recovered from the pandemic. The U.S. is currently carrying a $27.7 trillion debt pile after ending fiscal 2020 with a more than $3.1 trillion budget deficit.
“The Treasury secretary has to be a reveal for fiscal sanity. I pledge to do that. Our finances need to be on a sustainable longer-run course,” she said. “Right now, short-term, I have a hunch that we can afford what it takes to get the economy back on its feet to get us through the pandemic and to relieve the burdens that it’s all set on households and small businesses.”
3. Still tough on China
Yellen’s predecessor Mnuchin spent huge swaths of his session carrying out the administration’s economic conflict with China. Negotiations with Beijing turned out largely fruitless, and Trump’s China tolls did nothing to bring down the trade imbalance between the two nations.
Yellen said the new administration will remain focused on fleeing China to change its ways, though 4. Backing the buck
Trump vocally – and some said inappropriately – showed his strong preference for a weaker dollar, a stance rarely heard from previous White Houses. That seemingly will not be the position of the new administration, as Yellen said the incoming regime wants a stable currency whose price should be unwavering by market forces.
“The United States does not seek a weaker currency to gain competitive advantage, and we should in opposition to attempts by other countries to do so,” she said. “The intentional targeting of exchange rates to gain commercial advantage is unacceptable.”
A footnote: Yellen’s critics while she was at the Fed stipulate the central bank’s policies then undermined the dollar by keeping interest rates unnaturally low and through the nearly $4 trillion of bond buying that Yellen assisted oversee during her time.
5. More stimulus
Likely the first item on Yellen’s to-do list will be direct the administration through another round of spending aimed at those impacted by the pandemic.
Biden last week propounded a $1.9 trillion plan that likely will get pared down but still will launch the third notable fiscal volley at helping the U.S. through until the health-care system can get vaccines widely enough distributed to achieve rabble immunity.
“It will be my core focus if I’m confirmed as Treasury secretary to focus on the needs of American workers, those spirited in cities and rural areas, and to make sure that we have a competitive economy that offers good areas and good wages,” she said.
That will include “over time” working on the next bill “that I over we need to get through these dark times before the vaccination program enables us to get back to life as we knew it.”