Treasury Department’s Yellen suppresses inflation fears over Biden’s spending plan
© Reuters. Former Federal Reserve Chair Janet Yellen speaks during a panel discussion in Atlanta
WASHINGTON (Reuters) – US Treasury Secretary Janet Yellen on Sunday removed concerns that President Joe Biden’s plans for infrastructure, jobs and families will cause inflation, saying that spending will be gradual in over a decade.
“It’s pretty evenly spread over eight to ten years,” said Yellen, former Federal Reserve chairman, in an interview with NBC’s Meet the Press.
She said the Federal Reserve will monitor inflation carefully and have the means to address it if necessary.
“I don’t think inflation will be a problem, but when it becomes a problem we have tools to address it. These are historic investments that we need to make our economy productive and fair.”
Biden’s pandemic recovery and recovery plans total around $ 6 trillion and are paid in part through a series of tax hikes for the richest Americans, less than 1% of the population, and corporate tax increases.
Cecilia Rouse, chair of the White House National Economic Council, said there was no evidence that inflation was out of control.
“So when we get to the other side of this pandemic, I expect our job market to return and flourish,” Rouse said on Fox News Sunday.
“But for now we only expect temporary inflation, that’s what we expect from a major recession.”
Some Democratic lawmakers have raised concerns that the tax hikes will slow economic growth.
Yellen wouldn’t speculate on whether Biden would accept a Congressional bill that does not include a way to pay for the spending increases in his plans.
“He has made it clear that he believes that a permanent increase in spending should be paid for, and I agree,” she said.
Biden administration officials said a significant reduction in the corporate tax rate in 2017 by Republican Donald Trump did not result in a similar increase in investment and corporate competitiveness.
“We don’t want to hinder companies, but we want to make sure they are paying their fair share,” said Rouse.
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