From trade and sanctions to tax policy and financial regulation, the former Fed chair will be at the center of the new administration’s agenda.
Janet L. Yellen’s expected nomination as Treasury secretary will place the former Federal Reserve chair into a critical role overseeing President-elect Joseph R. Biden Jr.’s economic and national security agenda at an agency that has increasingly become a center of power. While Ms. Yellen’s views on monetary policy are well known from her time leading the central bank, her perspective on a range of issues that are part of the Treasury Department’s portfolio are less known. As Treasury secretary, Ms. Yellen will be the Biden administration’s chief economic diplomat and will face the challenge of re-engaging with American allies that have been put off by President Trump’s “America first” economic policies, including his use of tariffs. She will most likely be the point person in negotiations with China and will have substantial input on trade policy, along with the use of U.S. sanctions on countries such as Iran and North Korea. Domestically, Ms. Yellen will be the driving force behind the Biden administration’s tax policy — a significant role given that Mr. Biden made raising taxes on wealthy Americans and corporations a central part of his campaign. Ms. Yellen will also have the chance to tweak regulations stemming from Mr. Trump’s 2017 tax cuts, which left a great deal up to the Treasury in terms of putting a new taxing regime in place for multinational corporations. Under a Biden administration, the department could revise those regulations to raise taxes on some companies that operate abroad. And she will also be at the center of the government’s borrowing spree, which is financed by issuing Treasury securities and has pushed the U.S. budget deficit to levels not seen since World War II. Here is what we know, so far, about Ms. Yellen’s views in several areas where she will have a role to play. While Ms. Yellen is known for being dovish on monetary policy — meaning she supports lower interest rates — she has on many occasions expressed concern about the fiscal path of the United States and the amount of money it is borrowing. Ms. Yellen’s fiscal worries came before the coronavirus pandemic and the current downturn, a moment when most economists have encouraged the United States to not worry about the deficit and to spend as much as necessary to help households and businesses weather the slump. Still, Ms. Yellen’s previous comments suggest that she could be reluctant to push for big spending programs without raising taxes to offset the budgetary hit. The federal budget deficit soared to a record $3.1 trillion in the 2020 fiscal year and Republicans, who are expected to control the Senate, have once again started expressing concerns about how much the country is borrowing. In a 2018 interview at the Charles Schwab Impact conference in Washington, Ms. Yellen said the United States’ debt path was “unsustainable” and offered a remedy: “If I had a magic wand, I would raise taxes and cut retirement spending.” Last year, Ms. Yellen touched on the third rail of Democratic politics when she suggested more directly that cuts to Medicare, Medicaid and Social Security could be in order.
