Ensuring Americans have a “competitive economy” will be Janet Yellen’s focus as the next U.S. Treasury Department secretary, she told lawmakers Tuesday at her confirmation hearing before a vote on her nomination.
Both Republicans and Democrats have indicated they will approve Yellen’s Treasury Secretary nomination.
“I think there will be a dual mission: helping Americans endure the final months of this pandemic, and keeping people safe while getting them back to work,” she said in prepared remarks. “That’s our first task. But then there is the longer-term project. We have to rebuild our economy so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy.”
The Senate confirmation is the 74-year-old Yellen’s fifth during her three decades in economic policy. She will be the first woman to serve as Treasury secretary and will also chair the Financial Stability Oversight Council.
Yellen’s Treasury appointment comes at a pivotal time in the forthcoming presidential administration, as President-elect Joe Biden unveiled his $1.9 trillion COVID-19 relief package last week. The plan has received both praise and scrutiny, as the national debt has already exceeded the annual output of the country’s economy – around $21.6 trillion.
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But Yellen pointed to current interest rates, which she acknowledged are at “historic lows”, as a reason to provide Americans with the package now.
“Neither the President-elect nor I propose this relief package without an appreciation for the country’s debt burden,” she said. “But right now, with interest rates at historic lows, the smartest thing we can do is act big.”
Yellen’s nomination is expected to appeal to Democrats, Republicans, and Wall Street – all of which have worked with and expressed admiration for Yellen in the past. She would be among the few Biden cabinet picks likely to pass a nomination hearing with comparatively few bumps and bruises.
“For them, recommending her for Treasury Secretary was certainly a bipartisan gesture in the sense that Biden essentially skipped the opportunity to make a political statement,” said Tim Rood, SitusAMC head of industry relations. “Janet Yellen is someone I think is universally accepted and admired.”
In addition to overseeing and aiding in the logistics of the relief package, Yellen said she will play a key role in pushing the Biden administration’s economic agenda on Capitol Hill. It’s vital, she said, that lawmakers are aggressive in distributing aid in order to avoid an even longer recession.
“Economists don’t always agree, but I think there is a consensus now – without further action, we risk a longer, more painful recession now and long-term scarring of the economy later,” Yellen said in her prepared remarks.
For the housing industry, a Yellen Treasury Secretary appointment represents a steady hand at the wheel in a highly uncertain period.
“Yellen is a solid pick who can help steer the economy forward, calm the market when necessary and is unlikely to introduce any controversial policy surprises,” said Lawrence Yun, National Association of Realtors chief economist. “In regards to the real estate industry, she understands the important role our housing market plays in America’s economic growth and recognizes the societal benefits and wealth building opportunities that homeownership can bring, especially among minority households.”
Yun said he hopes Yellen will place an “equal emphasis” on policy affecting commercial real estate – bringing vibrancy to local communities and turning raw land into developable lots.
“That is especially important in the current environment of acute housing shortage,” Yun said.
Though Yellen doesn’t have a reputation as an aggressive sheriff, she has flexed regulatory muscle in the past. In her last act as head of the Federal Reserve in 2018, Yellen slapped Wells Fargo with a $400 million penalty, punishing the bank for opening accounts in customers’ names without their knowledge.