Janet Yellen: Smartest thing we can do on economy is ‘act big’

Janet Yellen, President-elect Joseph R. Biden’s pick to be the next treasury secretary, told Congress Tuesday that lawmakers should “act big” on the next round of coronavirus relief.

Mr. Biden unveiled a $1.9 trillion package last week intended to combat COVID-19 and mitigate some of the associated economic fallout.

“Neither the president-elect nor I propose this relief package without an appreciation for the country’s debt burden,” Ms. Yellen said. “But right now, with interest rates at historic lows, the smartest thing we can do is act big.”

Ms. Yellen was testifying to the Senate Finance Committee at her confirmation hearing one day before Mr. Biden is sworn into office.

She said the non-wealthy and people of color were struggling even before the pandemic hit last year.

“People worry about a K-shaped recovery, but well before COVID-19 infected a single American, we were living in a K-shaped economy — one where wealth built upon wealth while working families fell farther and farther behind,” Ms. Yellen said. “This is especially true for people of color.”

Ms. Yellen has already won positive marks from lawmakers on both sides of the aisle and her confirmation is expected to go relatively smoothly.

In 2014, the U.S. Senate voted 56-26 to confirm her as chair of the Federal Reserve.

But the hearing on Tuesday underscored the work that Mr. Biden and his economic team will have to do to convince skeptical congressional Republicans to support a package that includes some non-starters for the GOP, like a hike in the federal minimum wage to $15 per hour.

“Now is not the time to enact a laundry list of liberal structural economic reforms,” said Sen. Charles E. Grassley, Iowa Republican.

Mr. Grassley will soon cede the chairmanship of the Finance Committee to Sen. Ron Wyden, Oregon Democrat.

Mr. Wyden said Congress didn’t provide enough economic stimulus after the 2008 Wall Street crash.

“My top economic priority is avoiding the mistake Congress made in the last recession, which was taking a foot off the gas pedal before recovery took hold,” he said.