Yellen perviously served as chair of the Federal Reserve

By Virginia Chamlee
November 30, 2020 02:30 PM
Advertisement
Janet Yellen
| Credit: Alex Wong/Getty

President-elect Joe Biden confirmed Monday that he will nominate former Federal Reserve Chair Janet Yellen to be secretary of the treasury, a role likely to be defined by the economic challenges brought on by the novel coronavirus pandemic.

If confirmed by the Senate, Yellen will be the first woman to serve as the department's leader in its 231-year history.

The 74-year-old economist has a decades-long career at the upper echelon of American fiscal policy, having previously served as chair of the Council of Economic Advisers under President Bill Clinton and as chair of the Federal Reserve, a post for which she was nominated by then-President Barack Obama.

Yellen is currently a distinguished fellow-in-residence of economic studies at the Brookings Institution, an American research group. According to her bio on the Brookings website, she is now on leave from the institution, in light of her nomination.

If and when she is confirmed next year, Yellen would be a key aide for one of Biden's biggest priorities. The pandemic has upended many parts of the economy, with public health fears and government policy to curb coronavirus deaths forcing widespread business closures and fueling massive unemployment.

The federal government, meanwhile, has been divided over the size and urgency of another wave of coronavirus stimulus (in part because of the presidential election).

While the economy is rebounding from record-breaking contractions earlier this year, experts warn that rebound may likely slow as infection rates continue to spike and more local governments move to restrict activity in an effort to slow the spread of new cases.

Yellen, who led the Federal Reserve in the wake of the Great Recession, has previously warned of the dangers of not supporting state and local governments with fiscal aid throughout the pandemic.

In an October interview with Bloomberg, she said that early fiscal support in the health crisis was "impressive" but needed to be continued, and she also stressed the importance of getting the virus under control.

"Getting the infection level under control through contact tracing, testing ... we need a much more effective effort than we've had and if we have that it will be good not only for health but to open up the economy," Yellen said then.

Continuing fiscal support, she said, was also crucial.

"There are some limits [to monetary policy] and it's important for fiscal policy to fill in that gap," Yellen said. "While the pandemic is still seriously affecting the economy, we need to continue extraordinary fiscal support."

As the New York Times notes, a central component of Yellen's role as treasury secretary would be brokering a stimulus deal in a politically divided Congress — one that has so far failed to compromise on another round of aid.

"We face great challenges as a country right now. To recover, we must restore the American dream—a society where each person can rise to their potential and dream even bigger for their children," Yellen wrote on Twitter on Monday. "As Treasury Secretary, I will work every day towards rebuilding that dream for all."

In a press release announcing the selection of Yellen and others to key economic posts in his administration, Biden, 78, said the group is one that will "deliver immediate economic relief for the American people during this economic crisis and help us build our economy back better than ever."

"This team is comprised of respected and tested groundbreaking public servants who will help the communities hardest hit by COVID-19 and address the structural inequities in our economy," Biden said. "They will work tirelessly to ensure every American enjoys a fair return for their work and an equal chance to get ahead, and that our businesses can thrive and outcompete the rest of the world."

Reflecting confidence in her confirmation, the Biden transition team noted in its release that Yellen has been confirmed by the Senate for her previous roles on four separate occasions.