Treasury Secretary Janet Yellen predicted the United States would return to pre-pandemic employment levels by 2022 if Congress passes President Joe Biden's $1.9 trillion stimulus plan, saying Sunday the package was the fastest path to a full recovery.
"If we don't provide additional support, the unemployment rate is going to stay elevated for years to come. It would take until 2025 in order to get the unemployment rate down to 4% again," Yellen said on CNN's "State of the Union," citing data from a recent Congressional Budget Office report. "We would have a long, slow recovery, like we had after the financial crisis" of 2008.
"There's absolutely no reason why we should suffer through a long, slow recovery," Yellen said.
Yellen said Biden is open to a bipartisan proposal, but ultimately wants to see a full-throated stimulus package passed that fully jump-starts an anemic economy.
A new jobs report issued Friday pointed to signs of prolonged economic strain. With 10 million Americans out of work, the United States added only 49,000 new jobs to the economy in January, after losing 227,000 in December.
The unemployment rate dropped to 6.3%, from 6.7%, but experts said many Americans have stopped looking for work and are not counted as part of the overall unemployment tally.
"President Biden is strongly committed to working with all members of Congress in order to try to craft a package that addresses the needs of the American people. And, as you know, he's met with Republicans who are interested in working with him to craft a proposal," Yellen said. While "details of the package certainly can be negotiated over to try to craft something that's broadly acceptable," Yellen acknowledged, ultimately the nation will "need a big package. And we need to get this done quickly."
Yellen, a former chairwoman of the Federal Reserve, acknowledged concerns that the stimulus package could overstimulate the economy, causing inflation.
"We have the tools to deal with that risk [inflation] if it materializes. But we face a huge economic challenge here and tremendous suffering in the country. We have got to address that. That's the biggest risk."
Sen. Pat Toomey (R-Pa.), a fiscal conservative, objected to Yellen's reasoning during an interview on CNN.
Toomey said relief should be much more targeted.
"It's not an economy in collapse, the way it was in March. Today, we have serious problems for workers in the restaurant, the hospitality, the travel and entertainment sectors. That's really a handful of places. And if those folks have fallen through the cracks of the trillions of dollars we have already spent that's been meant to help them, then let's have a conversation about how to help those folks."
Sen. Bernie Sanders (I-Vermont), chairman of the Senate Budget Committee, dismissed several of the Republicans' demands. He opposes lowering the income cap for the full $1,400 checks to individuals making $50,000, from $75,000.
"To say to a worker in Vermont or California or anyplace else that, if you're making $52,000 a year, you are too rich to get this help, the full benefit, I think that that's absurd," he said on CNN. "And it's also, from a political point of view, a little bit absurd that you would have, under Trump, these folks getting the benefit, but, under Biden, who is fighting hard for the working class of this country, they would not get that full benefit."
Also Sunday, Dr. Anthony Fauci, Biden's chief medical adviser and director of the National Institute of Allergy and Infectious Diseases, said it was not wise to delay giving Americans the second dose of the vaccine.
Some professionals say the United States should prioritize getting first doses to as many individuals as possible.
"What we must go with, is the scientific data that we've accumulated, and it's really very solid," Fauci said on NBC's "Meet the Press." "We know that with each of these it's either 21 days or 28 days. You can do both. You can get as many people in their first dose at the same time as adhering, within reason, to the timetable of the second dose."
Asked about the delay in getting many Americans vaccinated, Fauci said: "The demand clearly outstrips the supply right now. If you look at the escalation of availability of doses purely on the ability and the capability of manufacturing that, it's going to escalate and will continue to escalate as we go from February to March to April and beyond. So even though there's a clear, clear discrepancy between this, the demand and the supply, that will get better as we get through February and into March, but that is the limiting factor."