President-elect Joe Biden has chosen Janet Yellen, the first woman to lead the Federal Reserve, to become the first woman to lead the Treasury Department, if she is confirmed.
Yellen became the first female chair of the Federal Reserve System in February 2014 during the Obama administration, after serving more than three years as vice governor. She previously served as head of the Council of Economic Advisers to President Bill Clinton.
She argued in August that Congress needed to approve additional stimulus to spur growth amid the coronavirus pandemic, as she wrote in an op-ed in the New York Times and told National Public Radio. As a member of the Climate Leadership Council, she supported taxing carbon emissions as the most efficient way to curb greenhouse gas emissions.
Biden, a former 36-year senator and eight-year vice president, had hinted Friday that his choice would be widely acceptable to Democrats. Her nomination was confirmed to The Associated Press by a person who spoke on condition of anonymity to discuss Biden’s plans.
“You’ll find it is someone I think will be accepted by all elements of the Democratic Party, from the progressive to the moderate coalitions,” Biden said Friday.
Biden has been naming top White House staffers and has begun naming his Cabinet picks, as he prepares to take office Jan. 20. Biden vowed to have a diverse Cabinet that “looks like America.” Biden named several other Cabinet positions earlier Monday: Longtime adviser Antony Blinken to lead the State Department; Alejandro Mayorkas, who would be the first Latino to lead the Department of Homeland Security; and Avril Haines, the former deputy director of the CIA, to serve as Director of National Intelligence. If confirmed, Haines would be the first woman to lead the intelligence community, where the upper echelons have traditionally been dominated by men.
Other prospects for Treasury could have been lightning rods for one faction or another, and faced greater difficulty winning confirmation in a narrowly divided Senate. Sen. Elizabeth Warren, D-Mass., was favored by progressives for her fierce advocacy for consumers against big banks, but that raised concerns among moderates and on Wall Street.
Dealing with China will be a major challenge for the next secretary. President Donald Trump has instituted tariffs on imports from China, in an effort to balance trade, and threatened more punishment because of that country’s initial lack of international cooperation in warning about COVID-19.
Biden told reporters Friday his goal is to get China to obey international rules. Biden said the U.S. would rejoin the World Health Organization and the Paris climate accord, from which Trump withdrew.
“It’s not so much about punishing China. It’s about making sure China understands they’ve got to play by the rules,” Biden said. “We have to not only deal with this pandemic, we’ve got to plan for the next one.”
Yellen told the Asian Financial Forum in January that despite a truce in the trade war with China, issues remained over Chinese subsidies to state-owned businesses and competition between the countries over technology such as artificial intelligence and 5G mobile networks.
“These issues are going to be quite difficult to deal with and will have very significant consequences for the global economy,” she said.
Biden praised recent policy of the Federal Reserve, which governs monetary policy by setting interest rates for banks that translate into interest rates for consumers, with a goal of full employment and stable prices. Low interest rates can lead to inflation, but high interest rates can lead to unemployment.
Biden said he supported the historically low interest rates during the pandemic, to help revive the economy through deficit spending.
“The way the Federal Reserve has been approaching dealing with the dollar, I think has been in a positive direction,” Biden said. “Our interest rates are as low as they’ve been in modern history. I think that is a positive thing. It lends credence to the possibility of us being able to spend the money and deficit spend in order to create economic growth right off the bat.”
Yellen served as chair of the Federal Reserve from 2014 to 2018. She had been vice chair for more than three years. She earlier had served as a Fed governor for three years in the mid-1990s and as chief executive of the Federal Reserve Bank of San Francisco from 2004 to 2010.
Yellen left the Fed board in 1997 to serve as chair of the Council of Economic Advisers for nearly three years. During that period, she led the economic policy committee for the Organization for Economic Cooperation and Development.
Yellen is professor emeritus at the University of California at Berkeley where she was on the faculty since 1980. She graduated summa cum laude from Brown University with a degree in economics in 1967 and received a doctorate in economics from Yale University in 1971, when she was the only woman in her class.
Contributing: The Associated Press