Yellen Urges Congress to Address Debt Limit
In her testimony, Janet Yellen emphasized President Biden's proposed budget and repeated her call for Congress to raise or suspend the US government's debt limit. Yellen stated that a default on US debt would result in an economic and financial catastrophe and urged all members of Congress to come together to address this issue.
Biden Administration's Economic Priorities
Yellen mentioned that the Biden administration's top economic priority is to bring down inflation and continue building on the actions taken to expand supply and provide cost relief in energy and healthcare.
Highlights of Biden's Proposed Budget
Yellen highlighted the key features of President Biden's proposed budget, which aims to make smart, fiscally responsible investments. The proposed budget includes the following:
A minimum income tax of 25% for taxpayers with wealth over $100 million.
An increase in the corporate tax rate to 28%.
A global minimum corporate tax.
Boosting Economic Growth with the Budget Proposal
Yellen explained that the spending side of the budget proposal is intended to improve economic growth by increasing the availability of high-quality childcare and free preschool and boosting the supply of affordable housing. The administration estimates the proposal will reduce the deficit by almost $3T over the next ten years.
Congressional Budget Office Assessment Pending
It should be noted that the Congressional Budget Office still needs to calculate the expected impact of the budget proposal on the deficit.