AILSA CHANG, HOST:
Janet Yellen was sworn in as Treasury secretary today. She is the first woman to hold that title. Vice President Kamala Harris administered the oath.
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VICE PRESIDENT KAMALA HARRIS: Congratulations, Madam Secretary. Congratulations.
JANET YELLEN: Thank you so much.
HARRIS: Thank you for all you do and have done for our country and will do.
CHANG: As Treasury secretary, Yellen will be the administration's point person on economic policy. She's been urging lawmakers to, quote, "act big" and support President Biden's $1.9 trillion economic relief package. Some Republicans in Congress are balking at that in what Democrats see as a rerun of the mistakes made during the last recession. NPR's Scott Horsley joins us now to talk more about all of this.
Hey, Scott.
SCOTT HORSLEY, BYLINE: Good afternoon.
CHANG: Good afternoon. So Yellen has been a White House economist. She's led the Federal Reserve. What is her argument for pumping almost - what? - 2 trillion more dollars of federal government money into the economy right now?
HORSLEY: Ailsa, the economy has lost a little bit of steam. The U.S. lost jobs in December for the first time in eight months. The pandemic continues to weigh on in-person businesses like restaurants and entertainment. So Yellen says this is not the time for Congress to pull the plug on economic assistance.
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YELLEN: Without further action, we risk a longer, more painful recession now and longer-term scarring of the economy later.
HORSLEY: She acknowledged during her confirmation hearing last week, Congress has done a lot already, and that's helped to pull the economy partway out of the deep hole we were in last spring. But we're not completely out of the hole yet. And Democrats believe one of the reasons we had such a slow recovery after the last big recession was that Congress didn't spend freely enough. You know, it kept the rescue package then under a trillion dollars and then cut off the relief too quickly.
CHANG: And what do Republicans in Congress have to say about that argument?
HORSLEY: Well, Republicans argue Congress just passed another $900 billion aid package a month ago. A lot of that money hasn't been spent yet. And South Dakota Senator John Thune has also been raising concerns about mounting government debt.
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JOHN THUNE: Many of us have said for a long time that anything we do related to coronavirus needs to be targeted. It needs to be fiscally responsible. It needs to take into consideration the fact that every dollar that we spend is a borrowed dollar.
HORSLEY: Now, Democrats wonder, where was that concern about the debt when the GOP was passing its big tax cut a few years ago? Yellen, for her part, agrees government can't run huge deficits forever. But she says the cost of borrowing money right now is really low and that the best way to put the government's fiscal house in order is to spend what it takes to beat the pandemic and then make the kind of investments that will help to promote future growth.
CHANG: Well, we're nearly a year into the pandemic here in the U.S. How is the economy doing right now?
HORSLEY: The International Monetary Fund actually put out a somewhat upbeat forecast this morning, it projects the U.S. economy will grow more than 5% this year after last year's sharp contraction. That's better growth than the IMF was predicting just three months ago. And the optimism is based on successful vaccines and that additional relief that was passed last month. At the same time, forecasters warn there's still a lot of uncertainty about how smoothly the vaccine rollout will go and what could happen with these new coronavirus variants.
CHANG: Exactly. OK. So what happens next in Congress?
HORSLEY: Well, the Congress - the White House is reaching out to lawmakers, looking to see if there's some wiggle room around the edges. Brian Deese, the incoming director of the National Economic Council, told CNBC the administration would like to work with Republicans, but only up to a point.
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BRIAN DEESE: We're very open to people's input and ideas. That's the process that's happening right now. But we do need to move with speed here, so we don't find ourselves a month or two or three from now in a place where the virus isn't getting under control, the economy is in a worse place and we're all asking ourselves why we didn't act.
HORSLEY: Democratic Senate leader Chuck Schumer echoed that, saying he'd like to craft a bipartisan bill, but Democrats will act on their own if they have to. And we could see a step in that direction, Ailsa, as early as next week.
CHANG: That is NPR's Scott Horsley.
Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
