Yellen will stay on as Biden’s Treasury chief as debt fight looms

But in recent months, inflation has subsided, Democrats have performed surprisingly well in the midterm elections, and the pressure to make sweeping changes to Biden’s economic team has diminished.

People close to Yellen, the first woman to serve as both Treasury secretary and Fed chair, also said she had considered leaving for family reasons and because working at the Treasury is highly politics — and would become more so with Republicans in control of the House.

The question of whether she would stay has also delayed further discussions about possible lower-level moves to the White House team, administration officials said.

“Janet is staying,” a senior White House adviser said. “So it’s settled.”

Another official close to Yellen said that while she considered going back to private life, she remained under stress about implementing policies enacted during Biden’s first two years. These include hundreds of millions of dollars in tax credits for electric vehicles and semiconductor manufacturers, and new funds for tax enforcement by the Internal Revenue Service. She was also the resource person in the administration’s efforts to implement a global price cap on Russian oil exports.

One of his biggest fights will be over whether to raise the government’s debt ceiling later this year. Some conservative Republicans demand deep spending cuts first, and they wield greater power in the House as a result of concessions accepted by the president Kevin McCarthy to secure the hammer.

“There’s a lot to do and a lot of things are going to be very difficult, and it’s good for the world that Janet is still here to do that,” said the second official close to Yellen.

Biden and Yellen also face the possibility of the United States and other major economies slipping into recession as the Fed and other central banks raise interest rates to curb the biggest rise in inflation. for decades.

Larry Summers, a former Treasury secretary who in the past has criticized some of the Biden administration’s spending policies, welcomed the news, calling Yellen “a source of great stability in the Treasury at a time when so many others things in politics and economics are so unstable both in the world and in the United States.

Yellen’s conversation with Biden about the job was first reported today by Bloomberg News.

Yellen, one of the world’s foremost macroeconomists, joined the Biden administration in early 2021 as initial economic gains from congressional pandemic programs began to dry up and new variants of Covid were increasing cases across the country.

In choosing Yellen, Biden relied on a well-known personality who was liked and liked by most Democrats, respected by many Republicans, acceptable to Wall Street, and aligned with the president’s no-surprises approach. It was overwhelmingly confirmed by the Senate, then helped push Congress to approve $1.9 trillion in Covid relief spending, on top of the historic $4 trillion the government had already authorized.

But she also wielded less influence in the West Wing than her recent predecessors in the job and found herself at odds with the White House at times, people familiar with the matter say.

Kate Davidson contributed to this report.

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