Janet Yellen says Congress needs to ‘go big’ for Covid relief program

Treasury Secretary Janet Yellen said on Friday that despite significant job gains last month, Congress still has to “go big” in handing over President Joe Biden’s $ 1.9 trillion relief package to hand over millions of people at work earlier.

In an interview with PBS NewsHour on Friday, Yellen said Biden’s package shouldn’t be cut just because the February jobs report showed 379,000 new jobs had been created, the best performance since October.

At this rate, it would take another two years for the country to regain full employment, she said. But with the administration’s package, she said the country could see a return to full employment by next year.

“It’s a big package, but I think we have to go big now, and we can afford to go big,” Yellen said. “The most important thing is to get our economy back on track and help people get their lives back to ensure this pandemic does not permanently injure our workforce.

Yellen said the unemployment rate, which fell to 6.2% in February, overestimates the improvement in the labor force because it does not count the 4 million people who have stopped looking for work and dropped out of the market. work. She said the real unemployment rate was 10%.

After House approval last week, the Senate is now debating the $ 1.9 trillion relief package with supporters trying to keep Democrats on board in the 50-50 House because no Republican should vote for measurement.

Asked about the turmoil in U.S. financial markets over the past two weeks as interest rates began to rise, Yellen said she did not see the development as a sign that investors were starting to fear that the inflation does not get out of hand. She said the rate hike was a sign the economic outlook was starting to improve as more people were vaccinated and Biden’s tax package moved through Congress.

The Federal Reserve “has the tools to fight inflation if this becomes a problem, but I don’t see the markets … worried about it,” Yellen said.

Yellen also said Biden remains firmly committed to raising the minimum wage to $ 15 an hour. The administration will seek other legislation later this year where the proposal can be included, after the Senate parliamentarian ruled that it could not be part of the relief bill, she said.

The administration is working on a ‘Build Back Better’ measure to increase spending on infrastructure that will also be used to address racial inequality issues by increasing support for skills training and education, she said. . The administration is also keen to address other issues, such as paid time off and childcare, she said.

The national debt, which has reached levels not seen since the end of World War II in terms of the ratio to the whole economy, is not a threat at the moment given that interest rates, even though they have increased, remain at their historic level. low levels, she said.

“The spending we are currently making is arguably helping our debt trajectory by getting our economy back on track,” Yellen said.