Treasury Secretary Janet Yellen says Americans can expect a 'big return' from Biden's $4.1 trillion spending proposal
- President Biden's spending plans can offer a "big return," Tres. Sec. Janet
- The measures should be paid for while interest rates sit at historic lows, she added.
- If inflation rises more than expected, the government "has the tools to address it," Yellen said.
The president on Wednesday rolled out a $1.8 trillion spending proposal that includes funding for paid family and medical leave, universal pre-K, and childcare. The measure follows the March passage of Biden's $1.9 trillion stimulus package and joins the president's $2.3 trillion
That's not to say the government shouldn't offset the multitrillion-dollar price tag. The Biden administration rolled out a handful of tax hikes and stronger enforcement to cover the spending, but those proposals were swiftly rejected by Republicans. The GOP has criticized Biden's public-works plan and a proposed corporate tax increase, calling it a "slush-fund" and a "Trojan horse" for Democratic priorities.The
Stricter tax compliance would also play a critical role. The country is currently estimated to lose $7 trillion through tax underpayment over the next decade. Stepping up compliance efforts and adequately funding the IRS can also boost tax collection, Yellen added.The Treasury Secretary also rebuffed concerns of the massive spending fueling a sharp rise in inflation. Administration officials and the Federal Reserve already anticipates the latest stimulus and economic reopening to drive a sharp but temporary bout of stronger inflation. While Biden's latest proposals are far larger than the March stimulus, plans to spend them over eight to 10 years cuts down on the risk of rampant inflation, Yellen said.
"I don't believe that inflation will be an issue, but if it becomes an issue, we have tools to address it," she added. "These are historic investments that we need to make our economy productive and fair."
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