Treasury Secretary Yellen denies report that she suggested cutting COVID relief over inflation concerns

United States Secretary of the Treasury Janet Yellen denied reports by Bloomberg this week that she pushed for the American Rescue Plan to be one third smaller due to her concerns about future inflation.

Yellen admitted last week she was wrong about inflation not being a concern in an interview last year, and that she and the Biden administration could not have predicted future COVID-19 variants and the invasion of Ukraine by Russia, which have added onto existing troubles.

“I was wrong about the path inflation would take,” Yellen said in an interview on Thursday. “There have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that at the time I didn’t fully understand.” 

This week she is publicly denying a report by Bloomberg that claimed she had urged the Biden administration to cut the COVID relief package by one third due to concerns that future inflation would hamper the progress made by a large relief package. “I never urged adoption of a smaller American Rescue Plan package, and I believe that ARP played a central role in driving strong growth throughout 2021 and afterwards,” Yellen told NPR. 

Yellen is scheduled to appear at some upcoming Congressional hearings where she will likely face questions about her admission to being “wrong” about United States inflation last year. She will probably also face some scrutiny over the Bloomberg report saying she championed a smaller American Rescue Plan price tag.

The White House released its own response to the claims that any cabinet members pushed for a smaller relief package, saying this week, “the American Rescue Plan spurred the most equitable recovery in memory.”