A Network of the National Association of State Treasurers
Policy Update:

Senate Finance Begins Review of Yellen Nomination

Screenshot of Yellen from her nomination hearing on 1/19/2020. Source: Senate Finance Committee
Brian Egan, Policy Director, NAST

Yesterday, the Senate Finance Committee held a hearing to review President-Elect Biden’s nomination of Janet Yellen to serve as the Treasury Secretary.

Chairman Chuck Grassley (R-IA) opened the hearing by outlining his concerns regarding the incoming administration’s tax proposals — following up that the incoming Treasury Secretary will play a large role in formulating and executing tax policy for the country. He also highlighted Yellen’s extensive background in academia and government, specifically her former role of the Chair of the Federal Reserve’s Board of Governors. He also emphasized the need for bipartisanship and the need to move away from divisiveness.

Ranking Member Ron Wyden (D-OR) underscored that the ongoing pandemic and its economic fallout will remain the main focus of any incoming Treasury Secretary. He stated that there is still an urgent need for additional stimulus and stated that he knows Yellen understands that “going small” on economic relief would be a mistake and commended accomplishments and experience.

Yellen opened by sharing her belief that economics is a means to help people. She suggested that Congress’s actions during the pandemic have prevented a lot of suffering, but more must be done. She closed by reiterating her commitment to work with Congress in a bipartisan way.

Yellen went on to questions on a host of policy issues, including several relevant to NAST and its members. In particular, she lauded the Biden Administration’s infrastructure plan goals, shared her support for a national register of lost and found retirement plans, and stressed the need for national study of how limitations to the State and Local Tax (SALT) deduction impact state and local governments’ ability to provide critical services.

Senator Bob Menendez (D-NJ) asked specific questions relating to the pandemic impact on state and local finances. Yellen responded by explaining how unaddressed state and local budget shortfalls resulted in slashed public sector workforces that caused a massive drag on the nation’s economic recovery. She expressed her concerns that the country is again seeing major layoffs of public workers. Senator Rob Portman (R-OH) asked about the impacts of failing to make investments in state and local governments. Yellen responded that state and local governments will need to lay off essential workers, causing ripple effects through the entire economy.