February 3, 2023

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Yellen Denies Urging Smaller Biden Relief Plan in Early 2021

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(Bloomberg) — Janet Yellen denied advocating for a smaller American Rescue Plan than the $1.9 trillion package proposed by the Biden administration and passed by Congress in early 2021, after an advance copy of a book about the Treasury secretary showed she initially urged scaling it back by a third.

Her statement — issued, unusually, on Saturday following a Friday report by Bloomberg News on excerpts from the book — illustrates the administration’s struggles to convey a unified front as the fastest inflation in 40 years severely threatens Democrats’ chances to retain their thin congressional majorities in November’s midterm elections.

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“When President Biden assumed office, the nation was facing acute economic challenges. It was a time of great economic uncertainty, with legitimate risks of a downturn that could match the Great Depression,” Yellen said in the statement. “I never urged adoption of a smaller American Rescue Plan package, and I believe that ARP played a central role in driving strong growth throughout 2021 and afterwards.”

The book, “Empathy Economics” by veteran Washington journalist Owen Ullmann, is due out Sept. 27. It says that Yellen privately agreed with former Treasury Secretary Lawrence Summers — who severely criticized the size of the aid plan — “that too much government money was flowing into the economy too quickly.” 

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Ullmann’s account sheds new light on a policy debate that preceded the eruption of inflation, which now poses a major political threat to Biden and congressional Democrats.

Fears of overheating have since proved…

Bloomberg News

2022-06-05 10:22:04

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