Yellen Confirmed as Treasury Secretary
Yesterday, the U.S. Senate confirmed Janet Yellen’s nomination by a vote of 84-15, making her the first woman Treasury secretary in the Department’s 232-year history. Yellen, one of Biden’s first Cabinet-level nominations, is an economist who also served as Chair of the Federal Reserve from 2014 to 2018, where the Fed’s policies led to a strong labor market and record-long expansion that drove unemployment to its lowest rate in 50 years before rising again due to the COVID-19 pandemic.
“I have very strong disagreements with Dr. Yellen on a number of her positions, particularly in the tax policy arena, but she has committed to us that she will work with us,” said Senator Mike Crapo (R-Idaho), after the Senate Finance Committee unanimously approved her nomination by a vote of 26-0. “And I think the strong vote on our side to support her today is an indication that we want to engage.”
“I don’t think you could get a 26 to nothing vote to agree to buy a soda,” added Senator Ron Wyden (D-Ore.), who will soon assume the chairmanship of the Finance Committee. “So this is an indication that she is really an NBA all-star when it comes to Senate confirmation.”
Biden has committed to investing $2 trillion in green energy projects, infrastructure, and education to increase American competitiveness. Similarly, Yellen endorsed effective financial regulation and a carbon pricing system to fight systemic risks from climate change.
Biden also proposed a $1.9 trillion plan for coronavirus relief. Yellen urged senators to “act big” on the relief proposal to avoid a longer recession, longer-term job loss, and severe economic scarring. The relief package is already facing opposition from Republicans who claim the amount is too high.
According to Reuters, Yellen responded to senators’ concerns and questions by stating that she would consider raising tax rates for ‘pass-through’ small businesses—including sole proprietorships—raising capital gains taxes on the wealthy, and imposing a new minimum corporate tax.
Yellen’s remarks reflect a new position on government debt among policymakers and economists that focuses on interest rates being paid and the returns it generates, instead of the total amount being borrowed. Recently, the Treasury’s interest outlays have fallen lower than pre-pandemic levels.
