US Treasury Secretary, Janet Yellen and Federal Reserve Chairman, Jerome Powell have told Congress that more must be done to limit the economic damage from the coronavirus pandemic. And also to promote a full economic recovery in the United States.
During their mandatory appearance before the House Financial Services Committee, the leaders were “optimistic” about the future of the economy; but also warned that the economy needs help.
Yellen thanked Congress for passing President Joe Biden’s $1.9 trillion American Rescue Plan, approved only with Democratic support. All Republicans in the House and Senate opposed the measure.
“With the passage of the Rescue Plan, I’m confident that people will reach the other side of this pandemic with the foundations of their lives intact.”
Janet Yellen
She also indicated that as a result of the “growing economy”, people will be met intact “at the other side”.
“In fact, I think we may see a return to full employment next year.”
Janet Yellen
Powell testified that a recovery is far from complete. He also assured the Fed will “continue to provide the economy the support it needs for as long as it takes”.
“The Fed will not lose sight of the millions of Americans who are still hurting, including lower-wage workers in the services sector, African Americans, Hispanics and other minority groups that have been especially hard hit.”
Jerome Powell
The March 2020 COVID-19 relief law requires the Treasury Secretary and Fed Chairman to testify before Congress on quarterly basis. This is to provide updates on the state of the economy impacted by the pandemic.
This meeting marks the first joint appearance by the two economic leaders in their current jobs. It is also Yellen’s first congressional appearance since taking over as Treasury secretary.
Rollout of 1.9 trillion relief package Yellen powell
Yellen pledged a rapid roll-out from the Treasury of the new $1.9 trillion relief package. She also noted that the Treasury and Internal Revenue Service distributed more than 90 million direct payments of $1,400 to qualifying individuals. She asserted this was done within the first week the legislation was signed into law.
Yellen indicated she has been focused on quickly getting relief to the areas of greatest need, upon taking office. She further indicated that these areas include “smallest, small businesses, which women and people of colour disproportionately own”.
The Treasury Secretary also revealed that the Paycheck Protection Program created by last year’s legislation often didn’t reach the smallest businesses. She said the Treasury is working with the Small Business Administration to “tweak” the implementation of the programme. This is to ensure that the loans, which the government forgives if businesses don’t lay off their workers, can reach millions of more microbusinesses, especially those in rural and low-income areas.
Yellen also assured that the relief package will provide over $30bn to help renters and homeowners at risk of eviction. She said Donald Trump’s administration put in place rules that required tenants and landlords to provide a large amount of documentation to get rental assistance – documentation that the Biden administration is reducing.
“We’re cutting through the red tape for them, while still taking reasonable steps to prevent fraud and abuse.” Yellen powell
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