Yellen: Sending People Money 'Will Do a Huge Amount to Create Jobs'

Susan Jones | February 8, 2021 | 5:32am EST
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Former Federal Reserve Chairman Janet Yellen is now President Biden's Treasury Secretary. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
Former Federal Reserve Chairman Janet Yellen is now President Biden's Treasury Secretary. (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

( - Democrats are pressing for a $1.9 trillion COVID rescue package that would send an additional $1,400 to Americans who already have received an earlier payment of $600.

"This package will do a huge amount to create jobs," Treasury Secretary Janet Yellen told CBS's "Face the Nation" on Sunday.

Host Margaret Brennan noted that the $1.9 trillion bill does not contain a job-creation program: "And job creation is what we need to see. Don't you risk spending your political capital now when you need to create jobs in this next (infrastructure) bill?" Brennan asked.

"Well, there will be another bill that addresses job creation through infrastructure development, through investment in people, in education and training, addresses climate change, improves the competitiveness of our economy, and is designed to create good jobs with good pay, that involve careers for people," Yellen responded.

"But right now this package will do a huge amount to create jobs. The spending it will generate is going to lead to demand for workers, help put people back to work, especially when we can get vaccinations and the public health situation to the point where the economy can begin to open up again."

Yellen said President Biden wants to make sure the $1,400 payments go to "families that really need it, that are struggling."

"And, of course, it shouldn't go to very well-off families that don't need the funds and haven't been hard-hit by the crisis. So, he's discussing the appropriate cutoffs and phase-ins with members of Congress and is open to negotiating on those.

"But there are a lot of families that are struggling with lower income and need those payments."

Yellen said Biden is still discussing the income level -- $50,000? $75,000? -- that will determine which people receive the next round of direct payments.

"Well, President Biden is certainly willing to work with members of Congress to define what's fair," Yellen told CNN's "State of the Union."

"And he wouldn't want to see a household making over $300,000 receive these payments. But if you think about an elementary school teacher or a policeman making $60,000 a year, and faced with children who are out of school and people who may have had to withdraw from the labor force in order to take care of them and many extra burdens, I would -- he thinks, and I would certainly agree, that it's appropriate for people there to get support.

"So, the exact details of how it should be targeted are to be determined, but struggling middle-class families need help, too."

"So, you definitely think higher than $50,000 per individual, but you're not necessarily willing to commit to $75,000, is what I'm hearing," host Jake Tapper told Yellen.

"Yes," she agreed: "I think the details can be worked out. And the president is certainly willing to work with Congress to find a good structure for these payments."

As for concerns that the Democrats' $1.9 trillion "rescue" package would boost inflation, Yellen said she has to worry about "all of the risks to the economy."

And the most important risk is that we leave workers and communities scarred by the pandemic and the economic toll that it -- that it's taken, that we don't do enough to address the pandemic and the public health issues, that we don't get our kids back to school.

We have 10 million Americans who are unemployed, another four million who have dropped out of the labor force, particularly women who have child care responsibilities. We need to reopen our schools, make sure that children aren't falling behind, provide help.

We already have way too many small businesses that are closing. We need to provide help to get them to the other side. And we have already seen 1.3 million state and local government workers, first responders, policemen, firemen who've lost their jobs. And we need to get them back on the payroll.

And people are on the verge of losing the roofs so for their heads. The package provides rental assistance. We have 24 million adults and 12 million children that are going hungry every day. And we need to provide them with food. We have people suffering, particularly low-wage workers and minorities, and through absolutely no fault of their own.

We have to get them to the other side and make sure this doesn't take a permanent toll on their lives. So, we need a package that's big enough to address this full range of needs. And I believe that the American Rescue Plan is up to the job.

My predecessor has indicated that there's a chance that this will cause inflation to rise. And that's also a risk that we have to consider. I have spent many years studying inflation and worrying about inflation.

And I can tell you, we have the tools to deal with that risk if it materializes. But we face a huge economic challenge here and tremendous suffering in the country. We have got to address that. That's the biggest risk.

Yellen said the Democrats' bill is going to speed the economic recovery.

"There's absolutely no reason why we should suffer through a long, slow recovery," she said. "I would expect that, if this package is passed, that we would get back to full employment next year."

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