United States: Treasury Secretary Janet Yellen is responding to Republican criticism of the Democrats’ massive coronavirus pandemic response package by making an election-year argument that the current state of the US “vindicates” the efforts taken in 2021 to “get our economy back on track.”
With inflation decreasing, unemployment at 3.7%, and the United States appearing to defy recession predictions, Yellen was poised to defend the $1.9 trillion American Rescue Plan in remarks prepared for delivery Wednesday at a US Conference of Mayors meeting in Washington DC.
Republicans frequently blame the stimulus package, which was passed without a Republican vote, for the two years of increasing price increases that have harmed millions of American households.
Yellen’s Bold Assertion
“Many had argued that this Rescue Plan wasn’t needed. But I believe seeing where we are today vindicates the approach we took,” Yellen said in the prepared remarks. “President Biden and I believed that the most dangerous risk was in going too small.”
Biden’s Reelection Strategy
When President Joe Biden was running for reelection, he attempted to persuade disheartened voters that inflation had been managed well and the economic state of affairs was strong.
In a December 2023 poll conducted by the Associated Press-NORC Center for Public Affairs Research, about three quarters (76%) of Americans said they would like their government to focus on economic issues in the year that was present, nearly similar numbers with those at this same time last year.
Approximately 85% of Republicans and about 65% of Democrats stated that the economy was a crucial problem. According to an October AP-NORC poll, it is said that about three in four Americans declared the economy of their country as bad.
Yellen Highlights Benefits of COVID Spending
During the mayors’ conference, Yellen planned to state that Covid spending by the Biden government benefited states and local governments —and it could be worse off if they had their response smaller.
“Wages are up, and wage gains have been broadly shared, including by younger and less educated workers,” Yellen said in her prepared remarks, adding that the US had recovered “faster than our peers around the world.”
Christopher Waller, a top Federal Reserve official, said Tuesday that he is increasingly convinced that inflation will continue to fall this year, returning to the Fed’s 2% objective.
Waller said inflation was dropping while GDP and hiring remained strong, describing the combination as “almost as good as it gets.”