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Janet Yellen, the U.S. Secretary of the Treasury, urged Congress to follow the White House’s plan to pay off its $ 4.1 million investment plans with higher taxes, arguing that the country needed to contain the long-term U.S. deficits.
Speaking Sunday, Yellen defended Joe Biden’s attempt to impose higher taxes on businesses and wealthier Americans to fund $ 2.3 million in infrastructure spending and $ 1.8 million in programs social issues over the next decade, following criticism from Wall Street, American companies and Republicans. legislators.
But Yellen went a step further, saying it was important to offset the cost of the Biden administration spending plans to prevent the U.S. fiscal position from getting worse. With Republicans fervently opposed to any tax hike, and some Democrats hesitating on the scale and details of the tax hike, some lawmakers may be tempted to get a compromise that includes very high revenue hikes. limited.
“I think we are in a good fiscal position. Interest rates are historically low. They have been like this for a long time, and are likely to stay that way in the future. But we need fiscal space to be able to deal with emergencies, like the one we’ve experienced with respect to the pandemic, ”Yellen told NBC on Sunday.
“We don’t want to use all this fiscal space and, in the long run, we need to contain deficits to keep our federal finances sustainable. So I think we should pay for these historic investments,” he added.
Yellen’s comments came as the Biden administration prepares to begin negotiations with Congress to see if an agreement can be reached on its global economic agenda, which adds to the $ 1.9 million stimulus plan approved in March.
Biden is expected to travel to Virginia and Louisiana this week to promote his case for economic plans to the U.S. public, following his joint speech at last week’s Congress that focused heavily on them.
On the infrastructure plan, which the White House unveiled more than a month ago, Republicans have made a counter-offer worth $ 568 billion in spending, and party lawmakers have suggested an increase in rates of user to pay for at least part of the plan, although many Democrats are skeptical.
“There are ways to get there,” Ohio Republican Sen. Rob Portman told NBC. “We have some scheduled calls this week. I met with the White House late last week. Here is a way forward if the White House is willing to work with us. “
Ron Klain, head of the White House cabinet, said he was confident an agreement could be reached, and said Biden’s two “red lines” in the talks were that taxes would not raise anyone who earned less than $ 400,000 a year and “inaction” was not an option.
“We have time to talk to people on both sides, find where there is common ground, find what people agree on as mutually shared interests. I am optimistic that we can move forward on this in the coming weeks,” he said. tell CBS.
Biden’s push comes as the U.S. economy accelerates rapidly due to its winter downturn, thanks to the rapid implementation of vaccination and the impact of the stimulus bill. Some Republican economists and lawmakers have expressed concern that Biden’s other fiscal plans risk overheating the U.S. economy, but Yellen set them aside.
He said the new spending would come after stimulus funds have already been spent and “demand growth is moderate,” as it will be spread over eight to ten years.
Yellen also said the Federal Reserve had the capacity to cope with any rise in inflation. “We will monitor it very carefully,” he said. “We propose that the expense be paid. And I don’t think inflation is a problem, but if it becomes a problem, we have the tools to fix it. These are historic investments that we need for our economy to be productive and fair. ”
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