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US Treasury Secretary Yellen attended the Senate nomination hearing on Tuesday and called on senators to “act boldly” to increase spending in the fight against the epidemic. Since the benefits of boosting America’s economic growth outweigh the risks of increasing debt, it is also tough on China. To deal with China’s bad business habits, he stressed that he would not go after a weak US dollar and let the market determine the exchange rate. He also said that the Biden administration will eventually raise taxes on the rich and businesses.
In a video hearing of more than three hours, Yellen presented his vision for governance and will take action to reduce economic inequality, combat climate change and China’s unfair trade practices. Compared to the tense atmosphere at the appointment hearing of current Treasury Secretary May Mnuchin four years ago, the hearing process was peaceful and the Senate Finance Committee thanked her primarily for her appointment.
But the issue of tax increases has stirred the sensitive nerves of some senators. Yellen said that to support government spending, Biden’s government tax increases will eventually be implemented for wealthy businesses and individuals, but they must wait until the United States successfully fights the epidemic; it also revealed that the Treasury Department is considering the course of “ unrealized capital gains. ” tax.
In accordance with the schedule planned by the chair-elect of the Senate Finance Committee, Yellen confirmed the appointment on Thursday. The following is the speech of the former chairman of the Federal Reserve (Fed) on the five main topics during the hearing:
● The fiscal stimulus has more advantages than disadvantages
Yellen called on the senator to “act boldly” to save the economy. He told the Senate Finance Committee that the Treasury Department is keeping an eye on finances. “But now. In the short term, I think we can afford the cost of returning the economy to normal to help. We survived the epidemic and reduced the burden on families and SMEs.”
Yellen said that even if the debt burden accounts for a larger share of economic output, the Finance Ministry has not paid more interest on the debt due to low interest rates. You will pay close attention to this data as the economy improves. After the end of fiscal 2020 in the United States, a total of US $ 27.7 trillion of debt currently accumulates in the account.
Biden’s $ 1.9 trillion plan has yet to be approved by Congress, and the final scale is likely to be scaled down. Yellen’s core issue after taking office is likely to promote another round of anti-epidemic stimulus plans. He said he will “eventually” study the next bill to get him through the dark days before the vaccination program helps get his life back to normal.
● Continue with a tough stance on China
Yellen continued May Mnuchin’s tough stance on China and vowed to use all the tools to tackle China’s bad business habits.
She said: “We must address China’s unfair and illegal business practices. China has always harmed the United States by illegally dumping goods, erecting trade barriers, and subsidizing companies. China has also continued to steal intellectual property rights and obtain unfair technology through of forced transfers. Advantages. We will use all the tools to deal with these behaviors in China. “
● The exchange rate of the US dollar is determined by the market.
Yellen said that after taking office, he will seek a stable exchange rate. The dollar exchange rate will be determined by the market. The United States will not seek a depreciation of the dollar to gain a competitive advantage over other countries. By taking office, you will also prevent other countries from gaining advantages through the same means.
Current President Trump has repeatedly voiced his support for the weak dollar, but Yellen avoided mentioning the benefits of the weak dollar, such as boosting exports and purchasing power. Likewise, he did not mention the policy of strength of the dollar adopted during the Clinton administration. . During Yellen’s presidency of the Fed, he was criticized for the weakening of the US dollar due to ultra-flexible monetary policy.
● Taxes increase eventually, but not now
Yellen’s speech at the hearing highlighted President-elect Biden’s preference for tax increases for businesses and the wealthy, but emphasized that it will only happen after the epidemic is over. “The focus now is to provide relief and help families survive. The difficulty is not a tax increase.”
Yellen argued that some of Trump’s tax cuts in 2017 should be abolished, and the yield on U.S. Treasuries has been reported to have fallen. Before Trump’s tax cuts, America’s corporate and personal income tax rates were the highest in developed countries.
● A full-time climate change officer will be established.
Yellen said climate change has already posed an existential threat to the US economy, and full-time officials will be appointed to be responsible for climate change-related matters and deal with the systemic risks facing the financial system.
Yellen said investment in clean technology and electric vehicles will increase. In addition to reducing carbon emissions, it will also ensure the competitiveness of the US economy and create job opportunities.
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