Yellen says tax hike would pay for part of Biden’s infrastructure plan

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen on Thursday said tax hikes would be needed to pay for at least part of a large infrastructure, climate and education investment program that President Joe Biden plans to introduce later this year.

Yellen, in an interview with CNBC, said details were still being worked out on the clean energy and infrastructure package, which would come on top of a $ 1.9 trillion coronavirus relief plan that is currently under development at Congress.

She said this would include investments in clean energy to fight climate change and investments in education and training to boost the skill levels of American workers and boost the competitiveness of the United States.

“Certainly part of the package, the parts that are permanent, will be paid so as not to increase long-term deficits, but we are still working on the details of the package.”

The infrastructure, climate and education plan will likely be proposed later this year and would involve spending over a number of years, “and likely tax increases to pay for at least part of it. would probably scale slowly over time ”.

Biden’s $ 1.9 trillion COVID-19 stimulus package aims to ensure growth is strong enough to return to full employment faster than recent Congressional Budget Office baseline estimates, which predicted earlier this month – ci that, based on current laws, it would take until 2024 to reach pre-pandemic employment levels.

With Biden’s stimulus package and good progress on vaccines to beat the pandemic, “I think we could get back to full employment next year,” she said.

Yellen downplayed the potential risk of inflation from billions of dollars in new stimulus and infrastructure spending, saying inflation has been low for a decade and the Federal Reserve has tools to deal with it.

“The biggest risk is healing and people with this pandemic have a permanent impact on their lives and livelihoods,” if no further help is provided, she said.

(Reporting by Andrea Shalal and David Lawder; Editing by Leslie Adler and Aurora Ellis)