The former president of the American Central Bank (Fed) officially becomes the first female secretary of the Treasury. Janet Yellen was confirmed on Monday January 25 by the Senate. She is the third member of the government of Joe Biden, whose appointment receives the green light from elected officials after Pentagon chief Lloyd Austin and intelligence director Avril Haines.
A respected Democrat and economist, she was chosen by President Joe Biden to replace Steven Mnuchin as head of the Ministry of the Economy and Finance.
During a grand oral in Congress last week, the one who will hold the strings of the US budget had vigorously supported the massive emergency aid plan for the economy of 1.9 billion dollars proposed by Joe Biden. It is necessary “Think big”, pleaded Mme Yellen.
“There is a consensus now: without further action, we risk a longer and harder recession and long-term scars on the economy.”, had justified Janet Yellen before the senators.
Reluctance in the face of its promises
The pandemic and its attendant restrictions on activity have brought the US labor market to its knees, a part of the economy to which Mr.me Yellen, an unemployment economist, will be paying a lot of attention. Nearly 16 million Americans are currently living on unemployment benefits.
When Barack Obama arrived at the White House in January 2009, in the midst of the recession caused by the financial crisis, the unemployment rate was 7.2%, slightly higher than the 6.7% in December 2020, but weekly jobless claims were much lower. The rights to unemployment benefits are limited in duration, which sometimes explains the disparity between the figure for unemployment and the figure for aid applications.
To convince to vote for Joe Biden’s new plan, Janet Yellen noted that interest rates close to zero make it possible to borrow money without the cost of interest further increasing the debt of the United States. “In the long term, I think the benefits will be much greater than the financial costs of this plan”, she underlined in front of the elected officials.
It will have a lot to do because reluctance exists even in the Democratic camp. On the issue of state resources and taxes, the future Secretary of the Treasury indicated that she agreed to increase the corporate tax rate to 28%. In 2017, the Trump administration had dropped it from 35% to 21%.
The reform objectives to tax the richest are less clear. Mme Yellen let it be known that it would not “A tax on wealth” but that it would be an additional tax on income from investments for households with an income greater than a million dollars.