Americans will start seeing $1,400 federal stimulus checks showing up in their bank accounts this weekend, Treasury Secretary Janet Yellen said while defending the price tag of the $1.9 trillion COVID bill President Joe Biden signed into law Thursday afternoon — but she acknowledged the administration will be looking at “ways to fund” other projects beyond the landmark bill later on.
“I don’t believe we’ve overshot the mark,” Yellen told NBC “Today” anchor Savannah Guthrie in an interview airing Friday. “I think America has enough fiscal space to be able to afford this relief that Americans need.”
No tax increases were proposed to pay for the massive relief package, she added, but she acknowledged that they will come later when money is needed for other priority projects.
“When we tackle longer-run priorities and longer-term investments, we’ll look at ways to fund those projects later on,” Yellen said, clarifying that means “for other priorities, yes.”
There will also be payments coming out for rental and homeowner assistance, money to support the vaccination process, to open schools, and more, and that will all be done “as quickly as possible,” she said.
“Not all of it will be spent this year, but a good chunk of it, and into next year,” she said. “It’ll provide a lot of relief.”
Meanwhile, when the pandemic struck last year, the unemployment rate was at 3.5% and Yellen said she would like to see the nation get back there next year, and “if all goes well with the vaccination program, there’s a good chance of accomplishing that.”
Guthrie pointed out that the independent Congressional Budget Office has said the economy is now at about 3% below its potential, or about $600 billion to $700 billion.
“It’s almost like if you had a headache before and took one aspirin, knew it wasn’t good enough, but that doesn’t mean next time you take the whole bottle,” said Guthrie. “Is it far too big with temporary fixes that don’t address those underlying problems?”
Yellen responded that the package both addresses the pandemic and “helps people get to the other side intact.”
“We don’t want to have people be scarred by long spells of unemployment, being out of the labor market because children can’t go to school,” she told Guthrie. “We want to get the economy back operating in a normal way, and then we do have long-run challenges to address. We’re preparing to do that.”
The size of the COVID package has been slammed by House and Senate Republicans, who unanimously opposed the measure and called it a bloated bill filled with liberal wish list items that come at a time when the pandemic is becoming easier to manage and the economy is improving.
In addition to the $1,400 payments, the bill includes $300 weekly unemployment benefits, expansions of the Child Tax Credit, funding for vaccination distribution, and state and local government aid.
To date, the government has authorized $5.4 trillion in stimulus spending through six rescue packages that have been passed, including the CARES Act and others last year under then-President Donald Trump.