Thursday, July 7

Yellen denies report that she pushed for a smaller COVID-19 relief package


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WASHINGTON — US Treasury Secretary Janet Yellen said on Saturday she never pushed for cuts to President Joe Biden’s $1.9 trillion American Rescue Plan, rebutting a media report in which a biographer was quoted as saying she favored scaling it back to avoid inflation.

“I never urged adoption of a smaller American Rescue Plan package, and I believe that ARP played a central role in driving strong growth throughout 2021 and afterwards,” Yellen said in a rare response to a media report.

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The White House issued a statement of its own, arguing that the American Rescue Plan helped engineer a strong US recovery and that higher food and energy prices were not the result of the stimulus package.

Yellen is expected to face tough questions about inflation during two congressional hearings next week. Lawmakers will also likely ask about her admission last week that she was “wrong” in the past about the path inflation would take, citing unexpected shocks such as Russia’s invasion of Ukraine and China’s COVID-19 lockdowns.

Bloomberg on Friday quoted an advance copy of a biography on Yellen, written by journalist Owen Ullmann, who said that her concern about inflation was why Yellen pushed officials – without success – to reduce the size of the stimulus package by a third before Congress passed the program.

The book is due out on Sept. 27.

Congress passed the American Rescue Plan a year ago and it was signed into law a year ago, marking a signature achievement of Biden’s first year in office.

In her statement on Saturday, Yellen said that high inflation was now the Biden administration’s top economic priority.

“We are committed to addressing it (inflation) by respecting the independence of the Federal Reserve and giving them the space to act,” Yellen said on Saturday.

(Reporting by Andrea Shalal and Kanishka Singh in Washington; Editing by Lisa Shumaker)



financialpost.com