Yellen defends COVID spending, says it saved millions from losing jobs
Business
Yellen defends COVID spending, says it saved millions from losing jobs
WASHINGTON (Reuters) - US Treasury Secretary Janet Yellen on Wednesday will defend the Biden administration's response to the COVID pandemic, arguing that its stimulus spending and other policies led to robust growth and averted millions of job losses.
In her last major speech before leaving office on Monday, Yellen will argue that the Biden administration's stimulus checks, monthly child tax credits and enhanced unemployment benefits reduced major downside risks, and that inflation - which spiked everywhere - fell earlier in the US than in other rich countries.
While the US economy had done "remarkably well" in the aftermath of the pandemic, it outperformed other advanced economies and did better than in past recessions, Yellen said in excerpts released by the Treasury Department. The pace of inflation cooled dramatically as supply disruptions eased.
The Biden administration and Democrats in Congress enacted the $1.9 trillion American Rescue Plan Act in March 2021, after more than $3 trillion in COVID spending approved during President-elect Donald Trump's first administration in 2020.
The actions kept paychecks flowing for idled workers, paid rent and put thousands of dollars directly into Americans' bank accounts, fueling sharp increases in consumer spending at a time when the economy was plagued by pandemic-driven shortages.
Yellen, who last week offered a rare concession that the stimulus spending may have contributed "a little bit" to inflation, argued on Wednesday that it substantially offset the income gaps faced by some 10 million people who lost their jobs or left the labor force by the end of 2020.
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The spending averted "significant hardship" and supported demand, which allowed Americans to get back to work quickly, which in turn helped the US avoid the erosion of skills and fallout of long-term unemployment, she said.
