WASHINGTON – Treasury Secretary Janet Yellen is pushing back against Republican criticism of the Democrats' big coronavirus pandemic response package and making an election-year pitch that the current state of the U.S. economy “vindicates” the steps taken in 2021 to “get our economy back on track.”
With falling inflation, unemployment at 3.7% and the U.S. apparently defying predictions of a recession, Yellen defended the $1.9 trillion American Rescue Plan in remarks Wednesday at a U.S. Conference of Mayors meeting in Washington.
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The stimulus package, which was passed into law without a single GOP vote, is regularly cited by Republicans as the cause for two years of accelerating price spikes that hurt millions of American households.
“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. “President Biden and I believed that the most dangerous risk was in going too small."
As President Joe Biden seeks reelection, he is trying to convince voters who are gloomy about the economy that inflation is under control and the economy is strong.
Some 76% of U.S. adults polled by The Associated Press-NORC Center for Public Affairs Research in December said they want the government to work on issues related to the economy this year, nearly the same as the 75% who said so at this point in 2022.
About 85% of Republicans and 65% of Democrats named the economy as a top issue.
An October AP-NORC poll stated that roughly three-quarters of Americans described the nation’s economy as poor.
At the mayors' conference, Yellen said the Biden administration's COVID-19 spending benefited states and local governments — and that had the administration’s response been smaller the U.S. economy could be worse off.
“Wages are up and wage gains have been broadly shared, including by younger and less educated workers," Yellen said, adding that the U.S. had recovered “faster than our peers around the world.”
A top Federal Reserve official, Christopher Waller, said Tuesday that he is increasingly confident inflation will continue falling this year back to the Fed’s 2% target level.
Waller said inflation was slowing even as growth and hiring remain solid, a combination that he called “almost as good as it gets.”
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