Senate confirms Janet L. Yellen as Secretary of the Treasury

WASHINGTON – The Senate on Monday confirmed Janet L. Yellen, labor economist and former Federal Reserve chairwoman, as secretary of the Treasury, setting up a key lieutenant for President Biden at a perilous economic time as the new administration is trying to revive an economy that has been battered by the coronavirus pandemic.

By a vote of 84-15, the Senate confirmed Ms Yellen, making her the first woman to hold the highest office in the Treasury in her 232-year history. Her quick bipartisan confirmation underscored the support she has from Republicans and Democrats given her previous stint as Fed chairman from 2014 to 2018.

Ms. Yellen now faces a formidable new challenge. As Secretary of the Treasury, she will be responsible for helping Mr Biden prepare the $ 1.9 trillion stimulus package he proposed, lead it through Congress, and – if approved – to overseeing the deployment of trillions of dollars in relief funds.

The scale of the task became clear over the weekend, as a bipartisan group of senators virtually met with senior White House officials on Sunday and expressed doubt that such a package was needed.

Lawmakers on both sides have raised the possibility of scaling back some elements of the proposal, including eligibility for a series of suggested checks of $ 1,400 to individuals and ensuring a more targeted distribution of the additional aid, according to several people close to the discussion. They also asked the White House to provide data that would justify the proposed spending, which includes $ 350 billion in state and local aid and $ 130 billion to reopen schools closed by the pandemic.

Now Ms Yellen will be pushed into the middle of the talks tasked with convincing many Republicans and some Democrats that the economy needs another multibillion-dollar spending program. In her confirmation hearing and in her written responses to lawmakers, Ms Yellen echoed Mr Biden’s view that Congress needs to ‘act big’ to prevent the economy from healing in the long run and shut down. defended using borrowed money to fund another aid program, claiming not to do so. would leave workers and families worse off.

“The relief bill at the end of last year was just a down payment to get us through the next few months,” Ms. Yellen said. “We have a long way to go before our economy recovers completely.”

Ms Yellen also argued that “short-term budget support is not incompatible with long-term fiscal sustainability,” explaining that a healthier economy would ultimately generate more revenue for the government.

The Biden administration has said it hopes a package can gain bipartisan support in Congress. However, if Democrats have shown a willingness to turn to a fiscal mechanism known as reconciliation that would allow them to pass legislation by a simple majority and bypass the usual 60-vote threshold required.

David Wessel, a senior researcher at the Brookings Institution, where Ms. Yellen recently worked, said she will likely play a key role in working with Congress given her credibility with Republicans and progressive Democrats. He suggested that, because of Mr Biden’s long history in the Senate, Ms Yellen might be less involved in haggling with lawmakers and deployed to make economic arguments for certain policies.

“I think they will use it as an asset when they need an expert,” Wessel said. “Especially if some people need to be convinced of something.”

Ms. Yellen will also have the responsibility of being the United States’ top economic diplomat at a time of frayed global tensions. Ms. Yellen will have to try to repair U.S. economic relations around the world, including with allies like Canada, Mexico, and the European Union, which have become strained under President Donald J. Trump.

These relations will be crucial given the Biden administration’s plan to try to combat what Ms. Yellen called China’s “illegal, unfair and abusive” economic practices by bringing together allies to pressure Beijing.

During her confirmation hearing, Yellen said China “engages in practices which give it an unfair technological advantage” and said the administration was prepared to use “the full range of tools” of states. United to remedy it. One of his first challenges will be to review the trade deal Mr. Trump struck with Beijing, including China’s failure to meet its commitments, and determine whether the United States should maintain the tariffs. over 360 billion dollars of Chinese products.

In the longer term, Ms Yellen plans to help implement Mr Biden’s tax proposals, which include higher corporate taxes and tax increases for the wealthy.

Ms. Yellen plans to make other big changes to the Treasury Department’s mission, including using its powers to help assess the economic risks of climate change and create incentives to support clean energy technologies. It will also focus on promoting policies that reduce racial inequalities.

“It is the responsibility of the Secretary of the Treasury to strengthen the United States economy, foster widespread economic prosperity, and promote an economic agenda that leads to long-term economic growth,” Ms. Yellen said in a written response to lawmakers published Thursday.

Ms Yellen will be under pressure to quickly staff a Treasury department that had been depleted under her predecessor, Steven Mnuchin. Her deputy, Wally Adeyemo, will need confirmation from the Senate and Ms Yellen will need to select under-secretaries to be in charge of international affairs, sanctions and national finance.

Earlier this month, the Treasury Department announced a chief of staff, Didem Nisanci, and a team of senior advisers, many of whom served in the Obama administration, to work with Ms. Yellen. On Monday, the Treasury announced a new hiring list, including the appointment of Mark J. Mazur, a former senior Treasury official under the Obama administration, as deputy assistant secretary for tax policy in the legislative affairs office.

Emily cochrane contribution to reports.