Treasury Nominee Yellen Warns of ‘Self-Reinforcing’ US Downturn, Vows To Aid Needy

President-elect Joe Biden’s treasury secretary nominee Janet Yellen said on Tuesday the United States is experiencing a historic crisis due to the coronavirus pandemic and its economic fallout that requires urgent action to avert a “self-reinforcing” downturn.

Yellen, who previously served as U.S. Federal Reserve Chair, spoke at an event in Delaware where Biden formally introduced his top economic policy advisers as he prepares to take office on Jan. 20 amid a battered 💰Economy and large-scale job losses.

“It’s an American tragedy and it’s essential that we move with urgency. Inaction will produce a self-reinforcing downturn, causing yet more devastation,” Yellen said.

Yellen said the pandemic has disproportionately impacted the most needy Americans. Yellen said it is important to make sure the economic recovery leaves out no one as she pledged to “find collective purpose to control the pandemic and build our 💰Economy back better than before.”

Earlier on Tuesday, outgoing Treasury Secretary Steven Mnuchin urged the U.S. Senate to support $300 billion in new grants to small businesses to keep them from failing amid the intensifying public health crisis.

“These businesses cannot wait two or three months” for aid, Mnuchin said.

Mnuchin defended his action to end some Fed lending programs, a move that will limit Yellen’s options in backstopping credit markets if she is confirmed to the post by the Senate after being nominated by Biden. Mnuchin said his action was not an “economic decision” but one based on the aid law passed by Congress.

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Meanwhile, deadlocked negotiations over a new coronavirus economic aid package picked up some picked up momentum, as a bipartisan group of lawmakers floated a $908 billion relief proposal.