Yellen wins unanimous Senate panel vote for Treasury despite Republican tax, debt concerns

WASHINGTON: The U.S. Senate Finance Committee on Friday unanimously approved Janet Yellen’s nomination as the first woman Treasury secretary, indicating that she will easily win full Senate approval, but Republicans called for her to work with them in developing economic policies.

Yellen’s nomination was approved 26-0 in the evenly split committee, with concerns expressed by Republicans about President Joe Biden’s ambitious plans for massive coronavirus relief spending, infrastructure investment and tax hikes failing to sway them against the former Federal Reserve chair.

“I have very strong disagreements with Dr. Yellen on a number of her positions, particularly in the tax policy arena, but she has committed to us that she will work with us,” Republican Senator Mike Crapo said after the vote.

“And I think the strong vote on our side to support her today is an indication that we want to engage.”

Biden has proposed a $1.9 trillion coronavirus relief plan and has pledged to invest here $2 trillion in infrastructure, green energy projects, education and research to boost American competitiveness.

At Yellen’s confirmation hearing before the committee on Tuesday, Republicans expressed concerns over the price tag and increased debt in a return to fiscal conservatism after running up deficits with the 2017 tax cuts and nearly $5 trillion in coronavirus spending last year under former Republican President Donald Trump.

Democratic Senator Ron Wyden, due to take over as Senate Finance Committee chairman in coming days, said he is pushing for a full confirmation vote later on Friday. But Senate leaders from both parties, still wrangling over how to organize the evenly split chamber, have not indicated any timing for a Yellen floor vote.

“I can tell you, a lot of times I don’t think you could get a 26-to-nothing vote to agree to buy a soda. So, this is an indication that she is really an NBA All-Star when it comes to Senate confirmation,” said Wyden.

A full confirmation vote just days after Biden took office would put the 74-year-old PhD economist and daughter of a Brooklyn, New York family doctor quickly to work on a deep economic crisis sparked by the coronavirus pandemic. She broke a similar gender barrier when she became Fed chair in 2014, a role she held until 2018.

Yellen’s Republican predecessor, Steven Mnuchin, was not confirmed until three weeks after Trump’s 2017 inauguration, and then by a 53-47 nearly party-line vote in a Republican-controlled Senate.

CONCERNING COMMENTS

Yellen’s confirmation hearing on Tuesday highlighted some Republican lawmakers’ concerns about her role in executing Biden’s economic policies, including a bigger federal debt burden and repealing parts of their signature 2017 tax cuts.

Yellen told senators they needed to “act big” on the proposed $1.9 trillion stimulus package or risk a longer recession and long-term economic scarring, job and revenue losses.

Her remarks represent a new attitude toward government debt among some economists and policymakers: Focus on the interest rate being paid and the returns it will generate, rather than the overall amount borrowed. In recent months, Treasury’s interest outlays have fallen from pre-pandemic levels due to lower rates.

In written answers to senators’ questions, Yellen said she would study raising tax rates for “pass-through” small businesses including sole proprietorships, imposing a new minimum corporate tax and raising capital gains taxes on the wealthy. She also endorsed an effective carbon pricing system and financial regulation to combat systemic risks from climate change.

With Yellen still awaiting confirmation, the Biden administration on Wednesday named Andy Baukol, a longtime career international finance official, as acting Treasury secretary. A confirmation hearing for Deputy Treasury Secretary nominee Wally Adeyemo has not yet been scheduled.