Treasury Secretary Janet Yellen urged Congress to increase the Treasury Department's budget as it struggles to launch new programs designed to distribute trillions of dollars in federal coronavirus relief.
Yellen, while testifying before the House Appropriations Subcommittee on Financial Services and General Government, told lawmakers that government funding – not accounting for inflation – is unchanged since 2010. She said the Treasury Department needs more expansive fiscal policy in order to implement the expansive programs approved with the passage of the $1.9 trillion American Rescue Plan and other stimulus measures.
"Our team has done valiant work implementing these programs with the resources at our disposal," she said in prepared remarks. "But we cannot continue to be good stewards of this recovery – and tackle the new bodies of work that Congress assigns to us in the years beyond – with a budget that was designed for 2010.
More aggressive spending is needed, Yellen said, particularly to track financial crimes, boost community development projects and crack down on tax cheats. She requested $13.2 billion to boost IRS discretionary spending and $417 million to help implement the American Rescue Plan.
"The speed and strength of our recovery – and our economy, long-term – depend on a fully funded Treasury," she said.
Yellen's comments come one day before the White House will release its multitrillion-dollar fiscal year 2022 budget. Biden is expected to propose $6 trillion in new spending for the next fiscal year, according to The New York Times, driven by his sweeping – and costly – plans to substantially expand the government-funded safety net and upgrade the nation's crumbling infrastructure.
Over the course of the past year, Congress approved nearly $6 trillion, or roughly 27.1% of the nation's GDP, in coronavirus relief spending, including $4 trillion passed under former President Donald Trump.
To put that into perspective, the U.S. has spent roughly the same amount of money in the past year to confront the duel health and economic crises than it did on every war across the world in the wake of the Sept. 11 attacks (about $6.4 trillion), according to one analysis conducted by Brown University's Watson Institute of International and Public Affairs.
The government ran a record-shattering $3.1 trillion budget deficit in fiscal year 2020, and has already racked up $1.9 trillion in red ink for the first six months of this fiscal year.
And even though the national debt is on track to hit $30 trillion by the end of 2021, Biden and congressional Democrats are plowing ahead with attempting to pass the president's nearly $4 trillion Build Back Better agenda, which is comprised of the $2.3 trillion American Jobs Plan and $1.8 trillion American Families Plan.
Although Yellen has previously advocated for paying down the nation's debt, she said in March that the U.S. still has more room to borrow.
"I would say we've changed somewhat since 2017 when I said that," she said at the time. "And it's partly because the interest rate environment has been so very low."