WASHINGTON, Jan 10 (Reuters) – US Treasury Secretary Janet Yellen is stepping in to oversee billions of dollars in federal climate and infrastructure spending that she believes will transform the economy, close aides say, defying the Republican demands to resign.
Yellen’s oversight of roughly $270 billion in tax credits for electric vehicles, home solar panels and other climate purchases included in the Anti-Inflation Act has made her a central climate figure in President Joe Biden’s administration.
However, the high profile and signals from markets and some economists of an imminent recession are expected to fuel Republican calls for Yellen, 76, to resign, as she cites her overly rosy inflation forecasts and her failure to rein in federal spending they say is to blame.
Yellen has also squabbled with Republican lawmakers over the legal ceiling on US debt, warning that not raising the debt ceiling could threaten America’s creditworthiness and disrupt financial markets.
Yellen told CNBC late last year that she was “in good company” on misreading inflation and that Biden’s COVID spending plans were needed to fuel the recovery.
She has publicly and repeatedly shrugged off speculation that she would be stepping down in the middle of Biden’s four-year tenure, steeled by what close aides say her confidence in Biden’s continued support.
The White House and Treasury Department had no immediate comment on a Bloomberg report that said Biden had personally asked them to stay.
White House and Treasury officials say inflation has been spurred by supply chain issues and exacerbated by Russia’s invasion of Ukraine, but note that inflation is now easing and investment in manufacturing will ease future supply chain blockages.
“Secretary Yellen is committed to helping us meet the twin goals of reducing emissions and rebuilding America’s industry,” Senator Ron Wyden, chair of the Senate Finance Committee, told Reuters in an emailed statement.
REPUBLICANS SEE A RADICAL
As the first woman to serve as Fed Chair and Treasury Secretary, Yellen led another milestone in December: the launch of the first US banknotes signed by two women.
While Republicans were broadly supportive of Yellen’s confirmation as Treasury Secretary, some say they are disappointed with what they see as an overly progressive agenda, including a bid to forgive student debt that economists say will reduce the national debt by $300 billion to $600 billion could increase.
“Unfortunately, she is living proof that even talent falls out of favor when financial ability is subordinated to ideology,” wrote EJ Antoni, a research fellow at the conservative Heritage Foundation, in a recent blog post.
Treasury declined to comment on the Antoni blog.
Republicans, who now control the House of Representatives, have launched an investigation into Yellen’s Racial Justice Advisory Committee, saying that doing so would further politicize the department and intend to investigate their proposal for a 15% global minimum body tax.
In a letter to Yellen in December, senior Republicans, including Sen. Jim Risch and Rep. Kevin Brady, said the tax would have a negative impact on US companies and criticized Yellen for not acting on their concerns.
The Treasury Department did not comment on Republicans’ concerns, but officials previously said the department’s policy was overdue and badly needed.
In addition to advancing Biden’s national climate agenda, Treasury Department officials say another key priority for Yellen in 2023 will be to advance reforms from the World Bank and other multilateral lenders to free up more resources for countries to address climate change and other priorities .
Yellen, who has flown around 100,000 air miles in her job, is traveling to Africa next week, with planned stops in Senegal, Zambia and South Africa, as part of a broader US push to counter China’s outsized influence on the continent.
The minister’s growing frustration with Beijing — now the world’s biggest creditor — for not moving faster to restructure the debt of low-income countries in Africa will be a key problem, particularly in Zambia, Treasury officials say.
“Janet Yellen has put the United States back at the center of the multilateral system in relation to the global economy,” said Kevin Gallagher, who directs the Global Development Center. “Will it be perfect? No, but at least the United States isn’t 100% inward-looking like it was a few years ago.”
Reporting by Andrea Shaal; Edited by Heather Timmons and Suzanne Goldenberg
Our standards: The Thomson Reuters Trust Principles.
Comments are closed.