Yellen insists $1.9 trillion COVID relief plan will get Americans back to work
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Treasury Secretary Janet Yellen urged Congress to go big and approve the $1.9 trillion coronavirus relief plan — arguing that the economic boost would get millions of American back to work by next year, while not doing enough would slow the recovery for years ahead.
“I would expect that if this package is passed that we would get back to full employment next year,” she said Sunday on CNN’s “State of the Union.”
“The Congressional Budget Office issued an analysis recently and it showed that if we don’t provide additional support, the unemployment rate is going to stay elevated for years to come,” she told host Jake Tapper.
“It would take (until) 2025 in order to get the unemployment rate down to 4 percent again.”
Full employment means that Americans who are able and willing to work have found jobs.
The government reported last week that American workers filed 779,000 applications for unemployment benefits in January, a sign the market is still devastated by the pandemic.
The latest numbers also indicate that the total jobless claims filed during the pandemic have reached roughly 77.2 million.
The unemployment rate is now 6.3 percent down from a high of 14.7 percent in April.
Yellen reiterated President Biden’s vow to work with Republicans to pass the stimulus bill, but said time is of the essence because American families are struggling — ticking off the millions still jobless, small businesses closed, students unable to return to the classroom, children going hungry, and families facing eviction.
“There’s absolutely no reason we should suffer through a slow recovery,” she said, referring to the GOP proposal for a $600 billion package.
‘We need a big package, and we need to get this done quickly,” Yellen said.
During the CNN interview, she also shrugged off concerns by former Treasury Secretary Lawrence Summers that Biden’s $1.9 trillion plan, when combined with the relief package already approved by Congress in December, could overheat the economy and result in inflation.
Yellen said she worries about all risks posed to the economy, but she’s most concerned about helping American workers and communities suffering under the pandemic’s economic toll.
“We need a package that’s big enough to address this full range of needs. And I believe that the American Rescue Plan is up to the job. My predecessor has indicated that there’s a chance that this will cause inflation to rise. And that’s also a risk that we have to consider. I’ve spent many years studying inflation and worrying about inflation. And I can tell you have the tools to deal with that risk if it materializes,” she said.
“But we face a huge economic challenge here and tremendous suffering in the country. We’ve got to address that that’s the biggest risk,” Yellen continued.
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