The Senate on Monday voted by a wide margin to confirm Janet Yellen as the first woman to lead the Treasury Department.
Yellen is not new to the role of trailblazer as she also was the first woman to lead the Federal Reserve, from 2014 to 2018, and previously the White House Council of Economic Advisors.
Her role will be critical in the first weeks of the new administration as she will serve as the key negotiator with Congress in the bid to win approval for President Joe Biden’s $1.9 trillion rescue package to help the US economy recover from the Covid-19 crisis.
That will entail convincing skeptical lawmakers that the benefit of more spending outweighs concerns about the country’s soaring debt level.
“Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen told the Senate Finance Committee at her confirmation hearing last week.
“But right now, with interest rates at historic lows, the smartest thing we can do is act big.”
Earlier Monday, Biden said that while he would prefer bipartisan support for his stimulus plan, time is of the essence.
“If we don’t invest now, we’re going to lose so much altitude in terms of our employment base and our economic growth, it’s going to be harder to re-establish it,” he said.
“We can afford to do it now. As a matter of fact … we can’t afford not to invest now.”
But Democrats control the Senate only with the tie-breaking vote of Vice President Kamala Harris so getting the package through may require support from Republicans.
Democratic Sen. Ron Wyden, chairman of the Finance Committee, called Yellen an “exceptional economist” who is “supremely qualified” to lead Treasury at a critical time.
And even Kentucky Sen. Mitch McConnell, the Republican minority leader, supported Yellen’s nomination, despite opposition from over a dozen members of his party.
But McConnell has steadfastly expressed skepticism about large aid packages, and favored more limited steps.
Yellen also will have a role in enforcing trade rules, and repairing relations after the multifront trade wars pursued by former president Donald Trump.
But in the most contentious relations with China, Yellen last week pledged to use all available tools to address “China’s abusive unfair and illegal practices” that undermine the economy.
She said Beijing has been “undercutting American companies” with a series of policies, including illegal subsidies, dumping of products, theft of intellectual property and barriers to U.S. goods.
However, while Yellen agreed that “China is clearly, our most important strategic competitor,” unlike Trump, she stressed that it will be important “to work with our allies” to combat the challenge.