President-elect Joe Biden chose former Federal Reserve Chair Janet Yellen to lead the U.S. Department of the Treasury for her gravitas, quiet consensus building, and attention to data— qualities that served her well during a decades-long central banking career. Democrats and Republicans alike laud her judgment.
Now those strengths are being put to the test. Yellen, 75, needs to persuade a deeply partisan Congress to raise the debt limit without the kind of political brinkmanship that a decade ago led to the first downgrade of America’s public debt. (Yellen has said it must be raised by Oct. 18; at press time, a short-term measure to raise it into December was under consideration.) She also has to fight for Biden’s plan to spur the U.S. economy with historic, politically charged spending on infrastructure and social programs.
Her new job draws her into unfamiliar territory: negotiating in a narrowly split Congress where quarrels play out in public. She’ll need savvy in the world of lawmaker horse-trading and dealmaking to avert what she’s called a “widespread economic catastrophe” that would leave the nation “permanently weaker” if the debt ceiling isn’t raised.
Her predecessors Robert Rubin, Hank Paulson, and Steven Mnuchin could draw on decades of experience in managing client relationships at Goldman Sachs Group Inc. when they arrived in Washington. Yellen is more of an academic-cum-manager. “She’s not the most political secretary of the treasury we’ve ever had,” former Fed Vice Chair Alan Blinder says.
For some, that makes her a reassuring presence as the nation’s financial stability hangs in the balance. “I don’t think of her as a politician as much as I think of her as an economist,” says Michael Bennet, a Colorado Democrat on the Senate finance panel. “It leads her to being an important voice that’s separate from” partisanship.
Even fierce Biden critics put stock in her expertise. “The credibility of you two individuals is of substance right now and very important to us in the American government,” Representative Patrick McHenry, the ranking Republican on the House Financial Services panel, said last month to Yellen and Federal Reserve Chair Jerome Powell during a hearing in which he blasted the administration as dysfunctional.
Yellen declined to be interviewed for this story.
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