The Biden administration is sending Treasury Secretary Janet Yellen to unveil White House spending initiatives and suppress growing public unrest over the state of the U.S. economic recovery from the coronavirus pandemic.
The new position has forced Yellen to navigate deeply divided Washington as she works to sell off the president’s multi-trillion-dollar economic agenda and urge Congress to raise the debt ceiling while raising concerns about a downplaying rising inflation and worsening labor shortages – a distant reputation from her previous job as chairman of the decidedly apolitical Federal Reserve.
Over the past few weeks, Yellen has been a loyal guest on various cable news programs, including Sunday appearing on CNN to defend President Biden’s $ 1.5 trillion welfare package.
While the Democrats are still working out specific details, the move could include several highly controversial proposals, such as a plan to force banks and other financial institutions to hand over more customer information to the IRS and a tax on billionaires’ unrealized capital gains targets and other ultra-rich Americans.
Yellen has campaigned for the tighter IRS reporting – she called it an “easy thing” to bridge the gap between what taxpayers owe and what they actually pay – as well as the new billionaire tax introduced this week .
HOW WOULD THE NEW BILLIONARY TAX WORK?
“I wouldn’t call this a wealth tax, but it would help generate capital gains that make up an extraordinarily large portion of the income of the richest people and currently avoid taxation until they are realized,” she said on Sunday.
It’s not uncommon for Treasury Ministers to stumble for the government that hires them: Steven Mnuchin, who served under former President Donald Trump, made the rounds to speak about the Republicans’ 2017 tax cut bill, while Treasury Secretary Timothy Geithner of former President Barack Obama, the 2009 government bailout is often touted.
While Yellen has played a largely conciliatory role so far – she urged the Democrats to unite and support the President’s various initiatives – she has also achieved some important victories this year, including pioneering the Group of Twenty efforts Finance Minister, a global minimum tax on corporate foreign profits.
Still, Yellen’s foray into the political world marks a detour over the four years she spent at the helm of the US Federal Reserve.
She argued with Larry Summers, a former economic advisor to the Clinton and Obama administrations, about rising inflation after he sounded the alarm that consumer prices could potentially spiral out of control. Yellen called this assessment “wrong” during a CNN interview with Jake Tapper.
“I don’t think we’re going to lose control of inflation,” she said. “I, of course, agree that we are going through a period of inflation that is as high as Americans have seen in a long time, and that is something that obviously worries and worries them, but we have not lost control over the pandemic I expect these bottlenecks to subside. “
Summers fired back in a long twitter thread, argues that the likelihood that inflation will subside by the end of the year is less than 50%.
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“Indeed, I believe the gap between what the Treasury Department and the Fed say and the everyday experience of businesses and consumers with inflation has widened over the past few months. Summers wrote on Twitter, adding, “I’m curious to see at what point in the past 40 years the Treasury Department will think the risks of an inflationary spiral are greater than it is now.”