Yellen Pushes for Repackaged Biden Plan to Boost Economy

(Bloomberg) -- U.S. Treasury Secretary Janet Yellen said Congress can boost long-term growth in the economy if it finds a way to pass the remainder of the Biden administration's economic policy proposals.

“It's an economic policy that aims to expand our nation's economic potential through productivity-enhancing investments along with policies to encourage more people to join the labor market,” Yellen said in remarks Wednesday at an event in Chicago.

The comments echo some of President Joe Biden's State of the Union address from Tuesday evening, in which he called on lawmakers to reconsider parts of the Build Back Better legislation that collapsed in December in the face of opposition from Republicans and key moderate Democrat Joe Manchin of West Virginia.

No new legislation has yet emerged repackaging portions of the failed bill. Biden rebranded his economic agenda as “Building a Better America” during his address.

Asked after her remarks about the implications for the U.S. from the war in Ukraine, Yellen said, “There will be some impact on commodity prices, and there will be a lot of uncertainty as this evolves, but I don't expect a major impact on the U.S. trajectory.”

Eyeing Crypto

With regard to further expansion of sanctions on Russia, she said, “Nothing is off the table. But in the process of doing this, we've tried to spare Americans and our European and other allies with punishing consequences.”

“We will continue to look at how the sanctions work and evaluate whether or not there are liquid leakages. And we'll have the possibility to address them,” Yellen also said. Cryptocurrency “is a channel to be watched,” she added.

Yellen once again applied the label “modern supply-side economics” to define Biden's long-run strategy.

“Modern supply-side economics makes targeted public investments in areas like education and infrastructure, directs resources to under-served communities and workers and introduces incentives for people to enter workforce,” she said.

The Treasury chief made the remarks at the University of Illinois Chicago Innovation Center, a teaching and research facility, and was joined by Illinois Governor J.B. Pritzker and Chicago Mayor Lori Lightfoot, both Democrats.

Yellen also highlighted several steps taken by the Biden administration and other countries to punish Russia for its invasion of Ukraine.

“Russia is increasingly on an economic island,” she said.