Yellen Lending Economic Heft to Biden  02/27 09:40

   

   WASHINGTON (AP) -- On a cold, gray February afternoon, Treasury Secretary 
Janet Yellen stepped out of the West Wing wrapped in a puffy black parka and 
clutching a folder of documents, seemingly oblivious to the Washington custom 
of having an aide schlep the paperwork.

   Viewed as an outsider to partisan politics, she now has a place in President 
Joe Biden's inner sanctum, a Ph.D. economist who does the reading, knows the 
numbers and treats her staff as peers rather than underlings.

   Yellen had been at the White House to strategize about how to push through 
President Joe Biden's proposed $1.9 trillion coronavirus relief plan --- a 
package that could determine how quickly the U.S. economy heals, how the 
Democrats fare in the midterm elections and just how much Americans can trust 
the government to solve the nation's toughest problems.

   The House passed the package Saturday, sending it to the Senate.

   As a former chair of the Federal Reserve, Yellen carries the authority of a 
public servant who has already helped steer the economy back to health once and 
now has been called back at age 74 for an encore after former President Donald 
Trump declined to offer her another term as Fed chair.

   She is framing the need for the giant COVID-19 bill in starkly human terms, 
and her credentials are enough to give pause to Republican lawmakers and other 
economists who argue the package is so big it would overwhelm the economy.

   "Yellen is uniquely poised," said Brian Deese, director of Biden's National 
Economic Council. "She has as much experience and expertise of addressing the 
challenges of our time as any living economic policymaker today."

   Even in a Washington riven by partisanship, Yellen is held in high regard by 
members of both parties. As president of the San Francisco Fed, she sounded the 
alarm about the housing bubble before it fully burst in 2008. She helped nurse 
the economy back to health as the Fed's vice chair and then as chair sustained 
the longest expansion in U.S. history.

   Yellen's hard-won credibility is now staked on administering a dose of 
financial adrenaline and mass vaccinations that can bring back the 9.9 million 
jobs lost to the pandemic within the next two years, an unprecedented burst of 
hiring.

   Biden's proposed stimulus package is broad, with its $1,400 checks to 
eligible Americans and nearly $500 billion for schools and state and local 
governments. But Yellen believes that more narrowly targeted measures on 
unemployment benefits or food aid might miss deserving people like the mother 
who was forced to leave her job because the pandemic closed schools and 
childcare centers.

   "The truth is there are pockets of pain that go beyond what can be reached 
in those highly targeted ways," she said at a recent New York Times conference.

   The Biden campaign first contacted Yellen about ideas for financial relief 
in May, back when she believed her career in public service was over.

   After the Fed, Yellen joined the Brookings Institution and gave speeches on 
economic policy to major companies that paid her in excess of $7 million. She 
recommended that because of low interest rates Biden could embrace a large aid 
package financed by debt.

   It was a suggestion that brought her more fully into Biden's orbit. If Biden 
based his politics on empathy for hurting Americans, Yellen could supply the 
economic rigor to show how that empathy could be translated into policies to 
boost hiring and ease economic pain.

   Gene Sperling, a former director of the National Economic Council for Bill 
Clinton and Barack Obama, said both Biden and Yellen had a feel for how 
long-term job loss could crush people emotionally and economically.

   "That is a place where both of their hearts merge with the lessons and 
experiences of previous deep recessions," Sperling said.

   Sperling worked with Yellen during the Clinton administration when she was 
chair of the Council of Economic Advisers, a post that focuses on research. But 
for all the seriousness of the equations and charts, Yellen was game for 
indulging in some silliness.

   Sperling remembered one morning in 1999 when Yellen was debating how to 
describe a strong monthly jobs report at a meeting of senior White House 
officials. Sperling suggested that the pair do a little hallelujah dance. And 
they did.

   Yellen received her doctorate from Yale University when few women were 
becoming economists. She juggled parenthood with her work as a professor at the 
University of California, Berkeley, in the 1980s, helping to build her son's 
pinewood derby car as a colleague fed economic data into a computer.

   For a woman often perceived to be standing alone, Yellen has long been part 
of a team since her time at the Fed. She meets frequently with Biden, 
participates in daily White House senior staff meetings and speaks with Deese 
several times a week.

   What Yellen did at the Fed --- and now appears to be doing at Treasury --- 
is elevating the importance of workers, taking a fuller view of the economy at 
a cabinet agency that once was perceived as largely the domain of whisperers to 
Wall Street.

   "She's not antibusiness, not anti-Wall Street," said Claudia Sahm, a former 
Fed staff economist. "But she has brought workers and employment front and 
center."

   Biden's $1.9 trillion package is almost unfathomably large, coming after 
roughly $4 trillion already provided to support a shuttered and weakened United 
States.

   Critics of the plan, notably including Harvard's Larry Summers, also a 
former treasury secretary, say the price tag is more than the economy needs and 
could undermine other Democratic priorities such as infrastructure. In an 
online debate, Summers said he has enormous respect for Biden and the "serious 
and able people" on his economic team. Yet he has misgivings.

   "This goes way beyond what is necessary to meet the absolute imperative of 
relief," Summers said.

   But Biden and Yellen are undaunted, intent on steering the U.S. economy in a 
new direction --- one that puts a premium on job growth, relies on low interest 
rates to borrow and seems at odds with the previous administration's reliance 
on the stock market as a primary measure of success.