Three women were touted for the position of Secretary of the Treasury in Joe Biden’s administration, a role that will help determine the status of another coronavirus incentive plan.
Candidates for the post include Senator Elizabeth Warren of Massachusetts, Federal Reserve Board member Lael Brainard and former Federal Reserve Chairman Janet Yellen.
Both have stated that further financial relief will be a necessary step towards economic recovery, but have made different statements about the role the federal government should play in initiating a second stimulus package.
Last month, Brainard, who is considered a moderate Democrat, called for more financial support from Congress and stated that large parts of the economy – including the service sector and airlines – will need more help to move forward.
“The recovery remains highly uncertain and highly uneven – with certain sectors and groups facing considerable hardship. These inequalities risk slowing the recovery,” Brainard said during his remarks to the Society of Professional Economists.
Brainard suggested that targeted support to replace lost income would be an important step towards a stronger recovery process.
She noted that the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES ACT, plays a significant role in supplementing lost income for many low wage and service workers and that extending unemployment benefits will determine continued financial security.
“The financial security of displaced persons will depend to a large extent on whether unemployment benefits are extended or supplemented,” she said.
“The continuation of targeted support to replace lost income will be an important factor in determining the strength of the recovery. Apart from the course of the virus itself, the most significant downside risk to my prospects would be the lack of additional financial support,” she added.
Yellen concurred with this assessment, stating that while the Fed had already provided “an enormous amount” of support, Congress would need to continue to offer assistance to ensure the nation remains on track.
“There are some limits [to monetary policy]and it is important that fiscal policy fill that gap,” Yellen said. “While the pandemic is still seriously affecting the economy, we must continue to provide exceptional fiscal support,” Yellen said.
Yellen has previously stated that it is “essential” to support both households and businesses as they face increasing difficulties with income losses, and he supported the previous $2.2 trillion stimulus plan, which provided individuals with checks for $1,200 and increased unemployment benefits by another $600.
Warren, a progressive who outlined his own $750 billion economic stimulus package early in the pandemic, advocated a “grassroots” approach to aid. Her stimulus package would include not only financial relief for businesses and the unemployed, but also health insurance, student loan waivers and social security benefits.
“We need to show that we have a government that understands the scale of this problem and understands that the approach to the problem is to spend money…. into the hands of the people who will invest it at the grassroots level and help support this economy from the ground up,” she said in an interview with CNBC.
Warren has proposed to increase social security checks for veterans and recipients of supplementary security income by $200 a month and has urged Biden to “cut billions of dollars in student debt.
“Biden-Harris can cancel billions of dollars in student loans, giving tens of millions of Americans an immediate financial boost and helping to close the racial wealth gap. This is the most effective executive action available for a massive economic recovery,” she twittered on Thursday.
A second stimulus plan has yet to be passed by Congress, and although both House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell have expressed a desire to formulate another plan before the end of the year, its status remains in limbo.
Meanwhile, Biden has called for an extension of federal unemployment benefits