LIVE: Janet Yellen Faces Senate Confirmation Hearing for Treasury Secretary

(Jan. 19) Janet Yellen encountered early Republican resistance to President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan in her confirmation hearing to become Treasury secretary Tuesday, as she sought backing for what she described as vital support for the economy.

“It would be a false economy to stint” on Covid-19 relief, Yellen told the Senate Finance Committee. She highlighted that, with government bond yields historically low, U.S. debt-interest payments as a share of the economy are lower today than before the 2008 financial crisis.

Yellen said that help for the unemployed and small businesses would provide the “biggest bang for the buck,” and urged lawmakers to “act big” in efforts to rescue an economy battered by the coronavirus.

Republicans are already balking at Biden’s vast stimulus plan, unveiled last week, over its size and components including longstanding Democratic goals such as raising the minimum wage to $15 an hour and expanding family and medical leave.

“Now is not the time to enact a laundry list of liberal structural economic reforms,” Republican Senator Chuck Grassley said in his opening remarks. He noted that Congress just approved a $900 billion pandemic relief bill in December. He pointed to criticism that Biden’s proposal isn’t well targeted, and said, “It is important to focus efforts on pandemic relief.”

Senator John Thune, the No. 2 Republican in the chamber, asked Yellen "when is it too much” with regard to running up debt to finance increased government spending.

Yellen said that “it’s essential we put the federal budget on a path that’s sustainable” over time, but that the situation will be worse if investments aren’t made now to support economic growth.

“There is an advantage to funding the debt especially when interest rates are very low by issuing long-term debt,” Yellen also said. Asked about whether she’d endorse a debut 50-year bond, she said she would look at “what the market would be like for bonds of that maturity.”

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