Janet Yellen: First Female Treasury Secretary Confirmed
Janet Yellen was confirmed as the first female Treasury secretary on Monday, January 25, 2021. She won unanimous backing from both parties on the Senate Finance Committee and was confirmed by the full Senate on an 84-15 vote.
Her confirmation comes 232 years after Alexander Hamilton became the first Treasury secretary of the United States.
Yellen will be at the forefront of the Biden administration’s response to the coronavirus recession. At her confirmation hearing, she encouraged the legislature to “act big” in reaction to the pandemic.
Biden’s proposed rescue package amounts to $1.9 trillion, and that includes $1,400 relief payments for most Americans, as well as substantial aid to state and local governments and extended unemployment benefits. Yellen said, “The relief bill late last year was just a down payment to get us through the next few months. We have a long way to go before our economy fully recovers.”
The new stimulus program comes quickly after the federal government closed out fiscal 2020 with a more than $3 trillion deficit. This deficit, made worse by the pandemic and government spending to keep the economy afloat, has made the national debt nearly $28 trillion.
Yellen chaired the Federal Reserve from 2014 to 2018, where she was in charge of guiding the monetary policy that helped keep financing costs in check, thus boosting the economic recovery after the Great Recession. Yellen spent years as a professor before she entered the political arena as head of Clinton’s Council of Economic Advisers in the late 1990s. She is a labor economist by training. Senate Republicans have questioned Biden’s economic proposals but have not questioned Yellen’s confirmation. “There is no question she is qualified for this role,” said Sen. James Lankford, R-OK, who is on the Finance Committee.
Yellen is the first person ever to hold all three positions: Treasury Secretary, Chair of the Council of Economic Advisors, and Chair of the Federal Reserve. She is a crisis-tested leader, ready to address the financial policy decisions and urgent economic needs of the nation. At the Fed, she earned a reputation as a consensus builder, which will be useful when she’s dealing with a divided legislature.
She has already made pronouncements that attracted attention: Of cryptocurrencies, she said, “I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities. If confirmed, I intend to work closely with the Federal Reserve Board and the other federal banking and securities regulators on how to implement an effective regulatory framework for these and other fintech innovations,” Yellen said.
In a Tweet on 1/25/21, Senator Tammy Baldwin said, “I voted for Janet Yellen to become the first woman to lead @USTreasury in its 231-year history. Our new Treasury Secretary has deep experience that will be essential to take on the urgent economic crisis we face and #BuildBackBetter by investing in American workers.”
Senator Michael Bennet Tweeted, “Secretary Yellen’s overwhelming, bipartisan confirmation is an affirmation of her ability to lead and a positive sign for our country as President Biden’s administration begins. I’m grateful for her lifetime of service and willingness to serve once again.”
Not only will she shepherd Biden’s economic relief package through Congress, but she will also play a critical role in the new administration’s efforts to reduce income inequality. Yellen will work on an economic recovery package focused on creating manufacturing and clean energy jobs that is expected to debut next month.
“We are living in a K-shaped economy, one where wealth built upon wealth, while working families fell farther and farther behind,” she said during her confirmation hearing. “We have to rebuild our economy so that it creates more prosperity, for more people, and ensures that American workers can compete in an increasingly competitive global economy.”
Yellen will be the United States’ most senior economic diplomat; she’ll have to try to repair economic relationships around the globe after they had become strained under Trump. She also plans to focus on promoting policies that reduce racial inequality. “It is the responsibility of the Treasury secretary to strengthen the U.S. economy, foster widespread economic prosperity and promote an economic agenda that leads to long-run economic growth,” she wrote.
Ever the overachiever, Yellen was both valedictorian and editor of the school newspaper in her high school in Brooklyn. She also has a sense of humor; she made the most of both roles when she interviewed herself. She was the only woman in her 1971 Yale University class to achieve a Ph.D. in economics. She was the only female economics professor at Harvard for part of her time teaching there.
Economists say that Yellen’s credentials and the symbolism of her confirmation are a timely match. “One of the deficiencies we’ve seen is when you have homogeneity among a group of policymakers, even when they are well-intentioned,” said Kathryn Judge, Columbia Law School expert on financial regulation. “There are certain challenges they’ll be less inclined to see, and therefore less inclined to address.”
When Yellen left the Fed, the unemployment rate was 4.1 percent, which was far lower than when she took over. Rather than using the unemployment rate by itself as a marker, she created a dashboard of indicators for determining the health of the labor market, including the job openings rate and average hourly earnings.
“She understands how distinct this time is for the labor market, particularly for the lowest-wage workers out there,” said Diane Swonk, chief economist at Grant Thornton. “We’ve got a situation for low-wage workers that could cause some very deep scars, and fiscal policy will be required.”
