Treasury Secretary Janet Yellen on Wednesday argued that President Biden's sweeping $4 trillion economic plan is crucial to ensuring the U.S. maintains its status as the world's top economic superpower.
During a speech in Atlanta, Yellen credited "bold fiscal policy" for the economy's faster-than-expected recovery from the COVID-19 pandemic.
But she said the federal government needs to do more to address long-standing structural issues plaguing the economy, such as declining labor force participation, income inequality, the racial gap and the threat of climate change, calling on lawmakers to approve both the $1 trillion bipartisan infrastructure bill, as well as partisan $3.5 trillion spending plan.
"My largest concern is not: What are the risks if we make these big investments? It is: What is the cost if we don’t?" Yellen said in prepared remarks released by the Treasury Department. "We’ve grown used to America as the world’s pre-eminent economic power. We aren’t destined to stay that way, but with these investments, I believe we will."
Yellen's comments – delivered during her first domestic trip – come as the Senate finalizes the legislative text of the long-awaited bipartisan infrastructure deal, which includes $550 billion in new spending on roads, bridges, highways, broadband and water infrastructure.
Senate Majority Leader Chuck Schumer said the measure, which marks the biggest infusion of federal spending on public works in decades, could be passed as soon as this week.
At the same time, Democrats are trying to coalesce party support around a roughly $3.5 trillion bill that would make up the bulk of Biden's "American Families Plan," which includes expanding access to child care and education, making permanent the expanded child tax credit, increasing housing affordability and broadening health care access.
"I know that there is some debate about all this. There is a good-faith discussion about how much spending is too much," she said. "But if we are going to make these investments, now is fiscally the most strategic time to make them."
If passed, the two-pronged economic proposals will begin unwinding "destructive trends" and help to spur growth, Yellen said.
"We will lift the upper limit on how big our economy can grow; how prosperous America can be," she said.