Janet Yellen was confirmed by the Senate on Monday (Jan 25) as Treasury Secretary.
The 74 years-old economist became the first woman to serve in this position since the department was founded 232 years ago.
She was also the first chairwoman to lead the Federal Reserve – Yellen was nominated by former President Barack Obama and served from 2014 to 2018.
She will make history as well, as the first person ever to have led the three most powerful economic bodies in the U.S. government: the Treasury, the central bank, and the White House Council of Economic Advisers, which she chaired during the Clinton administration.
This New Yorker, born in Brooklyn, started to open doors for women a long time ago. Yellen was the only woman out of 24 students in 1971 to earn a doctorate in economics from Yale University.
In her career as a professor, she taught in universities like Harvard, Berkley, and the London School of Economics.
Among her new responsibilities in the new role are tax policy, government spending, financial stability, economic sanctions, and foreign-exchange policy.
During her confirmation hearing last week, she defended President Joe Biden’s $1.9 trillion American Rescue Plan, which includes a new stimulus check of $1.400, expands unemployment benefits, and increases funding for Covid-19 vaccination.
Yellen supported the price tag of the plan, criticized by Republicans as too costly. “Right now, short term, I feel that we can afford what it takes to get the economy back on its feet, to get us through the pandemic,” the new Treasury Secretary said.
“Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later.”
She also said the government is aware of the blooming deficit but believes that the country first needs to fight the pandemic and its consequences. “In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”
Regarding taxes, Yellen confirmed that no increase or repeals of 2017’s legislation are being considered in the near-term, at least not while the U.S. economy struggles with the pandemic effects.
Yellen’s nomination wasn’t a surprise and was welcomed by Wall Street and even Republicans.
Senate Republican Leader Mitch McConnell said Yellen’s speedy confirmation reflects his view that presidents should be able to assemble a team of “qualified and mainstream people.”
When her name was picked by Biden, late November, the main U.S. indexes rose.
Investors cheered the news, expecting she will work well with the Fed, considering her many years in the central bank – she was also chief executive officer of the Federal Reserve Bank of San Francisco from 2004 to 2010 and vice-chair of the central bank from 2010 to 2014.
Yellen’s name was seen as a relief by Wall Street since another name that had been circulating was Senator Elizabeth Warren, whose criticisms of big banks powered her decade-long political career.
Speaking of big banks, some hostility showed up recently when a disclosure form submitted by Biden’s administration revealed that Yellen earned more than $7 billion in the last few years by giving speeches to Wall Street banks, major corporations, and industry groups.
She received nearly $1 million alone for at least nine speeches to Citigroup in 2019 and 2020. She also was paid by Goldman Sachs, Credit Suisse, and several other Wall Street banks.
It’s common for former government officials to be paid by giving speeches. The private sector is willing to pay high dollar to listen to their economic and policy insights. However, in Yellen’s case, it raised some concerns about conflict of interest since she was picked again to a critical position in the federal government.