Janet Yellen Hopeful Congress Will Pass Biden’s Economic Agenda

(Bloomberg) -- U.S. Treasury Secretary Janet Yellen said she’s still confident U.S. lawmakers will overcome the current impasse in Washington and pass President Joe Biden’s economic agenda. 

“I’m very hopeful, and I full expect that Congress will pass both packages,” Yellen said Friday in an interview with CNN in Rome where she’s attending a Group of 20 summit with Biden.

Just before leaving for Rome on Thursday, Biden delivered a framework for the latest version of his economic agenda to congressional Democrats. Lawmakers in his party have so far continued to squabble over its contents and what they were prepared to support.

The president told House Democrats that his future, and theirs, depended on translating the framework into legislation and securing the votes to pass it.

The $1.75 trillion package, which the White House called “historic,” is half the size of a budget outline passed by the House and Senate in September in response to demands by moderates to reduce the price tag. Programs such as paid family leave and tuition-free community college didn’t make the cut.

Yellen also insisted that Biden will have additional chances to find support for elements of the package that have been eliminated in negotiations.

“Remember, President Biden is 10 months into his term,” she said. “He’s fully committed to working to achieve paid leave for the American people and to add vision and dental care to Medicare, and he has time to pursue these additional programs.”

Yellen also stuck by her view that elevated inflation won’t persist in a problematic fashion.

“I still would say its temporary, although I don’t mean just a matter of a month or two,” she said.

Yellen said monthly inflation readings in the U.S. were already declining and annual rates will “decline toward their more normal level of around 2%” by the second half of 2022 as the economy bounces back from the pandemic and supply bottlenecks are resolved.

In a separate interview with CNBC, Yellen added that she does not expect Biden’s additional spending package will cause inflation to remain high. That spending is paid for by tax increases and will be spread over a decade, she said, reducing its impact on prices.

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