President-elect Joe Biden plans to nominate Janet Yellen to be his treasury secretary, according to reports in The Wall Street Journal and CNBC.
Yellen, who served for one term as the chair of the Federal Reserve, would make history as the first female secretary of the Department of the Treasury, a particularly influential role now with the economy still reeling from the pandemic.
The 74-year-old economist is used to breaking barriers and will be one of the most experienced economic policy advisers to hold the position, especially compared to current Treasury Secretary Steven Mnuchin, who came to the White House with experience producing films and in banking.
She was the first woman to run the White House Council of Economic Advisers and served as a Fed governor in the 1990s.
Yellen isn’t simply breaking a gender barrier. If she’s confirmed as treasury secretary, Yellen would be the only person to have held all three of the most important economic policy positions in government ― running the Fed, the Council of Economic Advisers and then the Treasury Department.
“She brings a depth of experience that frankly no one else has,” said Claudia Sahm, a former Federal Reserve economist who served when Yellen was board chair. Sahm said that Yellen is an exceptional leader who excels in making everyone feel heard and drawing in different perspectives, exactly the kind of fresh perspective and thinking needed at the Treasury right now after four years of the Trump administration. “We have federal institutions that need to be rebuilt and reenergized.”
As Federal Reserve chair, Yellen was known for bringing more attention to the labor market as a key factor in making decisions about raising interest rates. And she also spoke up about how family-friendly federal policy could boost the economy.
As Treasury secretary, Yellen would have more influence to see those kinds of fiscal policies translate into reality.
Though some progressives criticized her for raising rates too soon during the Obama administration, possibly at a time when unemployment rates could have dropped further, many were heartened by the news on Monday.
“I’m very happy about the Yellen announcement,” said Heidi Shierholz, who leads the economic policy team at the progressive Economic Policy Institute and served in the Obama administration, citing Yellen’s strong performance as Fed chair. “One key thing about her: Her decisions are guided by data and evidence, not ideology and not partisanship ― it’s data. It’s evidence.”
Sahm said that while she may not have agreed with every decision Yellen made as Fed chair, she believes that they were made in good faith and backed by deliberative thinking.
“She reflects. There is no stone left unturned when she’s getting ready to make a policy decision,” Sahm said.
She also noted that Yellen has made an effort to speak out about diversity and inclusion in economics, a profession that still suffers from an overwhelmingly white, male perspective.
“We cannot do the best for the economy if we don’t understand the economy, if we don’t look (at least somewhat) like the people we are serving,” Sahm said. (Sahm herself is known for her criticisms over the lack of diversity in the economics world.)
It’s a searing point at a moment when the fragile economic recovery from the coronavirus doesn’t seem to have made its way to a number of vulnerable communities. The unemployment rate for Black men, for example, is still in the double-digits even as it has dropped to 6.9% overall.
Yellen was nominated to the Fed by President Barack Obama and received bipartisan support in 2014, when 11 Republican senators voted to confirm her. Many observers were surprised when Trump failed to renominate her in 2018, a break with precedent. Some, including this reporter, attributed Trump’s ditching of a qualified woman for a man to pure sexism.
Recently, Yellen has advocated for the government to do more to help boost the economy right now. “There is a huge amount of suffering out there. The economy needs the spending,” Yellen said an interview last month, according to the Journal.
Congressional Republicans are currently holding up any further efforts to stimulate the economy, even as unemployment benefits and other measures passed to deal with the coronavirus this spring are set to expire at the end of the year and as the U.S. faces a third surge of COVID-19 cases and deaths.