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Treasury Secretary Janet Yellen makes push for major stimulus, sees bigger risk to not doing enough

Treasury Secretary Janet Yellen on Thursday said a large stimulus package is still necessary to get the economy back to full strength, despite momentum suggesting that growth is off to a faster start than anticipated in 2021.

In a CNBC interview, the lead economic official in the Biden administration said the $1.9 trillion proposal could help the U.S. get back to full employment in a year.

“We think it’s very important to have a big package [that] addresses the pain this has caused – 15 million Americans behind on their rent, 24 million adults and 12 million children who don’t have enough to eat, small businesses failing,” Yellen told CNBC’s Sara Eisen during a “Closing Bell” interview.

“I think the price of doing too little is much higher than the price of doing something big. We think that the benefits will far outweigh the costs in the longer run,” she added.

Yellen said she’s not worried that all of the government spending could cause inflation down the road.

“Inflation has been very low for over a decade, and you know it’s a risk, but it’s a risk that the Federal Reserve and others have tools to address,” she said. “The greater risk is of scarring the people, having this pandemic take a permanent lifelong toll on their lives and livelihoods.”

Her comments come against the backdrop of a brightening economic picture in the U.S. as the Covid-19 pandemic subsides.

Biden tax hikes would likely phase in slowly, Treasury Secretary Yellen says

Treasury Secretary Janet Yellen said Thursday that any tax increases sought by the Biden administration to help pay for big-ticket spending would be introduced gradually.

Yellen, who spoke to CNBC’s “Closing Bell,” added that the proposed tax increases would likely come later in 2021 as part of a larger legislative package.

Reference: CNBC