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WASHINGTON, DC - JANUARY 29: (L-R) U.S. President Joe Biden meets with Treasury Secretary Janet Yellen in the Oval Office of the White House on January 29, 2021 in Washington, DC. Biden and the administration officials in the room stressed the need to urgently pass a COVID-19 relief package.
The U.S. will return to full employment in the next year if President Joe Biden's relief package is implemented, according to Treasury Secretary Janet Yellen on Sunday.
Full Employment
Full employment refers to an economy wherein the unemployment rate is equivalent to the non-accelerating inflation rate of employment.
Republicans dismissed the $1.9 trillion stimulus package as wasteful.
According to Yellen on CNN's "State of the Union," "If we don't provide additional support, the unemployment rate is going to stay elevated for years to come. It would take until 2025 in order to get the unemployment rate down to 4% again. We would have a long, slow recovery like we did after the financial crisis," reported HuffPost.
Yellen cautioned that the United States' unemployment rate would remain elevated in the span of the upcoming few years without the additional $1.9 trillion in federal support.
Also, she stated, "The Congressional Budget Office issued an analysis recently and it showed that if we don't provide additional support, the unemployment rate is going to stay elevated for years to come. It would take (until) 2025 in order to get the unemployment rate down to 4 percent again," reported KITV 4.
According to Yellen, "This package is going to really speed recovery. And analysis by Moody's and economists at the Brookings Institution show that very clearly - that we will get people back to work much sooner with this package. I would expect that if this package is passed that we would get back to full employment next year," reported Business Insider.
She said the repercussions of not passing a massive stimulus bill would be dire.
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Yellen's surmise coincides with the White House pushing Biden's package through Congress, where it faces disapproval from Republicans against its price tag and a number of its key elements.
Lawmakers are pressured to pass a relief package as U.S. citizens continue to suffer financially amid the COVID-19 pandemic's economic fallout.
According to the Bureau of Labor Statistics on Friday, long-term unemployment is nearing a historical peak almost one year since the pandemic began.
Almost 40 percent of unemployed workers have been out of work for half a year, and nearly nine million fewer Americans are working now than last February. The unemployment rate slid down to 6.3 percent in January.
Yellen remarked that the United States remains in a "deep hole" with millions of lost jobs.
Republican senators contended that the president's proposal was too expensive. They cited disapproval from Larry Summers, a Treasury secretary under President Bill Clinton, that passage of the measure could be susceptible to igniting runaway inflation.
Democrats are making efforts to ram Biden's $1.9 trillion proposal through Congress, even though few, if any, Republicans support it. The package involves a fresh wave of stimulus checks, a federal minimum wage hike, and extensive unemployment benefits.
Yellen cited two latest evaluation by Moody's Analytics and the Brookings Institution, which both predict the economy returning or nearly returning to pre-pandemic levels by 2022 if the president's plan is enacted.
