On Sunday, Treasury Secretary Janet Yellen said that the U.S. could see full employment in 2022 if Congress passes President Joe Biden’s $1.9 trillion stimulus package.
Yellen said that if the federal does not provide additional support, the pandemic-fueled unemployment is going to stay elevated for years to come. Without additional stimulus, it could take until 2025 to send the unemployment rate back down to 4%.
Long-term unemployment is edging toward a historical peak, almost a year into the pandemic-fueled downturn. According to the Bureau of Labor Statistics, nearly 40% of unemployed workers have been jobless for six months, and nearly 9 million fewer Americans are working now than last February.
Democrats in Congress have moved to pass the stimulus plan within two weeks without GOP support, using a parliamentary procedure known as reconciliation.
The plan is the first of two major spending initiatives Biden will seek and includes provisions like direct payments to Americans, weekly jobless benefits through September and funding for vaccines and testing. The second bill will focus on infrastructure reform, climate change and racial equity, among other things.
Yellen added that Biden’s plan is “big enough to address the full range of needs”, includes a wide range of immediate assistance for struggling families, such as $1,400 stimulus checks and extended unemployment, nutrition and eviction aid, and longer-term changes, such as a $15 hourly minimum wage.
The Republican offer cuts from Biden’s in major ways. Stimulus checks would be a direct payment of $1,000 instead of $1,400 and called for lowering the income cap for receiving the full $1,400 direct payment. Yellen, however, signaled that she was hesitant to lower the income cap to $50,000.
Pennsylvania Sen. Pat Toomey called Biden’s stimulus plan “inappropriate” since Congress passed an aid package in December, declaring it too expensive in a separate interview with CNN on Sunday.